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Managing the business of IT, and the challenge of more ‘value’!

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Launched back in the good times of the summer of 2009 with the mission of helping organizations manage the business value of IT, with a fanfare of videos from several CIOs and the support of Intel, the IT Capability Maturity Framework (IT-CMF) received a somewhat cool reception on the grounds of ‘yet another framework’. I got interested when I read an article a year later on how early adopters were talking about savings of up to 20% on the IT budget. That seemed to me to make it worth following the progress of IT-CMF as it developed with more attention, and in February this year Chevron published a case study of their success with the framework indicating IT-CMF can be seen to work over a sustained and difficult period.

But why is this interesting right now? Surely this is old news and those who are interested will have already looked at the framework, etc., etc. True, but was the pressure back then the same as now? Well, it’s the same pressure on the IT side to continue to reduce costs, but at the same time there’s the expectation to do more, and in particular to do more in the form of using new technology in new ways, which makes the need for a better understanding of business value even more important. Enterprise IT is almost always based on the ability to invest in order to reduce costs and improve operating efficiency of a particular element of the ‘back office’. This is the area of an enterprise which by its very nature is an overhead and cost effectiveness is a given, therefore most business cases have got a certain basic clarity about them!

The investments are usually definable, in fact have been pretty large and therefore visible in the business element they support, but operationally are difficult to separate from other activities and therefore to allocate costs to. Instead, most have to be lumped together and make the whole IT budget an ‘overhead’ in the enterprise’s accounts. Over a period of time the dependencies and integrations grow more and more complex – the classic spaghetti problem – and it’s harder and harder to be able to work out the business value of any single item. That is the problem that IT-CMF sets out to solve and it’s all neatly laid out at their main website.

It’s all about new tools, techniques, and methods, as development and deployment may be on a virtual machine on a hosted site, and the costs, including ongoing operations, will be on a charge per use basis. In short, it’s going to be a very different and perhaps very difficult model to justify in terms of business value using current means. And that’s where IT-CMF comes into play. It describes its core approach as ‘Managing IT like a Business’ and provides the following statement:

Managing IT like a Business means running IT like any other business and that involves shifting the focus from technology and production to a focus on customers and services. The IT-CMF describes the internal processes required to move an IT organization from a technology to a service orientation that provides customer-driven solutions to business problems… The transformation is complete when IT moves from a cost to a value center.

Okay, we got the message that alignment to the business is critical and needs to be measured a long time ago but it’s not that easy, and having to face up to doing this in the constantly changing environment of many small services of short development, deployment and retirements based on using new technologies and methods is daunting. I believe we are all going to need to consider more deeply exactly how we achieve this and, unlike other frameworks, IT-CMF is more up to date, has proven itself in some tough, large enterprises, and offers some new thinking.

This is not a claim that this is ‘the best’ as there are other established frameworks and of course ITIL is rightly considered the most widely applied methodology to ‘manage’ IT, but it is a recommendation to investigate the topic more widely, and to recognize that the existing challenges are going to change. And in a way that is both going to make ‘value’ management more complex and very different.

About the author

Andy Mulholland
Andy Mulholland
Capgemini Global Chief Technology Officer until his retirement in 2012, Andy was a member of the Capgemini Group management board and advised on all aspects of technology-driven market changes, together with being a member of the Policy Board for the British Computer Society. Andy is the author of many white papers, and the co-author three books that have charted the current changes in technology and its use by business starting in 2006 with ‘Mashup Corporations’ detailing how enterprises could make use of Web 2.0 to develop new go to market propositions. This was followed in May 2008 by Mesh Collaboration focussing on the impact of Web 2.0 on the enterprise front office and its working techniques, then in 2010 “Enterprise Cloud Computing: A Strategy Guide for Business and Technology leaders” co-authored with well-known academic Peter Fingar and one of the leading authorities on business process, John Pyke. The book describes the wider business implications of Cloud Computing with the promise of on-demand business innovation. It looks at how businesses trade differently on the web using mash-ups but also the challenges in managing more frequent change through social tools, and what happens when cloud comes into play in fully fledged operations. Andy was voted one of the top 25 most influential CTOs in the world in 2009 by InfoWorld and is grateful to readers of Computing Weekly who voted the Capgemini CTOblog the best Blog for Business Managers and CIOs each year for the last three years.

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