Biz to IT: Show me the money

A recent survey exposes how important it is for IT to convince line-of-business managers that their IT investments are dollars well spent

Rather than using a crystal ball to predict IT's future in 2009, I thought I would turn to those who, like it or not, have a direct impact on the future of IT: non-IT people at the managerial level or above. After all, the value these folks place on IT and its services will have a lot to do with the increase or decrease in the size of your department as we face a few tough years ahead.

[ For more on what IT should and shouldn't be doing, see "Seven things IT should be doing (but isn't)," "20 more IT mistakes to avoid," and "The 7 deadly sins of IT management." ]

Let me tell you, according to a recent survey of 100 of these managers from companies with 5,000 or more employees, it doesn't look good for IT.

More than 60 percent of the survey's respondents are advisors to the primary decision maker in their department or are the primary decision maker in creating line-of-business IT budgets. About a third of them believe that their IT investments are not being maximized, and 60 percent were only "moderately" confident that they understood how their IT dollars were being used.

Almost half of the companies surveyed had revenue greater than $1 billion. So these people have a lot of clout in influencing the direction and the size of very large IT departments.

Only 8 percent see a significant increase in their IT budget for 2009; 28 percent see some increase; 20 percent see a decrease in IT spending; and 31 percent see no change from 2008. A full 13 percent have no idea how IT spending will play out in 2009 -- no comment on that one.

With 70 percent of those surveyed saying that their departments are directly charged either a flat fee, by service, application, or per seat, it appears to me that IT needs to do a far better job communicating what its value is.

Maybe the CIO needs to hire a PR firm.

Admittedly, the survey was taken at the behest of a company, Apptio, that sells IT cost optimization services. And the executives there believe that if you use their SaaS offering, it will go a long way in explaining how IT spends its money. Of course, there is always the possibility that this is something you don't want to know. In which case, pretend you never read this column.

I'm not recommending the Apptio solution, mainly because I've never used it, but allow me tell you some of what it can do to put a bigger shine on IT services. Either that or get yourself a publicist.

Given that 34 percent of the respondents said they really don't understand how the dollars they budget for IT is being spent, and 41 percent said IT has not communicated its main initiatives and goals for next year, it is a good time to get started getting your IT message across.

Part of the problem is that an IT budget typically isn't itemized like your cell phone bill. Most of the time, you just get the big number for the quarter.

The Apptio solution breaks it down to what it costs to deliver a service, such as e-mail or collaborative software or customized applications to the finance department. It does this with two sets of data. Activity data monitors the activity of any open activity ticket. It brings back, for example, stats from your monitoring systems and your asset management systems, and it tells you how heavily the service is utilized.

I suppose this is where it can get dicey if the numbers show that systems are being underutilized. Then the question becomes, Who made the decision to waste our money?

The other set of stats comes from the hardware and software side, revealing how much the department is spending on people, datacenter time, servers, and the like. Line-of-business managers can log in and get a view into these IT costs for their department. It is sort of like a P&L view of your department and IT.

Short of a good publicist or a company off-site meeting at which each department does a bit of show and tell, a software solution that offers insight into what IT accomplishes would be very good PR.

Sometimes a little information in the right hands is all it takes.

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