Friday, January 10, 2014

The Need for Return On IT

The latest developments in technology have changed the way world does business. It shrunk the world and now created a global market place where a company in Cork no longer competes with local businesses only but also has to compete with businesses from Bangalore or Shanghai. This in turn created newer challenges where businesses had to increase their efficiency, performance, profitability and competitiveness through more technological initiatives.
As companies attempted to focus on technology initiatives, the actual implementation sometimes created a gap where they have been broadly applied to justify a myriad of IT budget expenses on technology / product acquisitions and seismic shifts disguised as process improvements.
And when this use of technology in business evolved further, the number of redundant applications grew – many of them becoming legacy systems with no clear indication of the business need they support. This defeated the fundamental theme of technology implementation, which was more about reaping greater rewards from simpler steps but not the very reverse. Technology stops delivering at that stage when we have a complex eco system with no clear roles and responsibilities defined.
The need to economically align IT systems with business in a dynamic environment should be the key driver behind the new ROI(T) efforts. In the current economic scenario it is more than ever relevant that we optimize operating expenses by more effectively using IT and business investments.
We need to recalibrate the orbit of IT around the world of business and initiate efforts that reach an adaptive state where progress stems from a general trend toward adoption of higher standards, combined with a greater awareness of good governance techniques, such as metrics and incentives that help bridge the two worlds.
A methodical approach needs to be carried out for evaluating the ROI(T) that aims to understand the complete inventory of applications and carry out a rational analysis that would help in reducing cost and complexity from IT systems. This needs to be done for as simple IT system as a web site to a more complex ERP systems etc. As with every implementation, having an overall IT strategy where the role and relevance is clarified with clear road map helps. This overall strategic direction leads to the following steps on a need basis
  • Set overall IT policies and direction, with the customers’ needs in mind — but don’t seek to control every operational detail.
  • Establish an IT steering committee to set priorities and approve standardization plans. Business value is the filter to be used.
  • Define infrastructure and architecture strategies that drive business value, such as making a office “green,” and establishing performance controls.
  • Implement service level agreements between IT and business units that guarantee uptime but also promote alignment through use of business metrics.
Thoughts?

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