Comparing Your IT Shop to Others

Benchmark the right way to gain useful insights.

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&And Compare Management Practices that Drive IT Value

While the IT budget covers cost, it's the IT management practices that drive the value your firm gets for its spend. All IT practices at some point should be benchmarked to ensure they are as efficient, effective and of requisite quality. But there is a smaller set of practices that have the greatest impact on the value of the services. Four areas you should examine include (See Figure 3):

  • How do you plan and budget? The IT budget for your upcoming year is a reflection of, among other aspects, how you translate business demand into budgets, and how your IT governance structures such as steering committees balance strategic and tactical investments. Firms that wish to drive more IT value find that they first need to address the inputs and processes by which they arrive at their budget by, for example, expanding the charter and membership of an IT executive steering committee.

  • How do you allocate budget and resources to projects and services? IT must optimally apply constrained financial and staff resources to business needs, looking at factors ranging from alignment with strategy to project risk and existing demand levels. Firms that gain the most value from IT have strong practices for managing to business cases, scoping and prioritizing initiatives, and tracking these initiatives as a portfolio that reflects these priorities and trade-offs.

  • How do you manage projects and service levels? All IT shops should strive to improve quality in project and service delivery. CIOs must investigate project management—such as how you train or source your PM expertise; quality assurance—such as how you use change control; and service management—such as how service-level agreements and operating-level agreements are developed, tracked and communicated.

  • How do you ensure business satisfaction and alignment? IT can't succeed unless it understands and influences business expectations—and when it does, it can ensure satisfaction with IT's services. Leading firms address this by thinking through their business-IT interaction model and defining roles, such as client relationship managers, to build and maintain the communication channels. And these organizations market IT's contribution and measure effectiveness and satisfaction over time.

Figure 3: Comparing practices for planning and managing IT

Major area Sample topics within area
Planning and budgeting • How budgets are mapped to business areas and services

• How reallocation of budget during plan years is handled

• Role IT steering committee plays in planning and budgeting

• Input of IT strategy and architecture into planning

Allocating budget and resources • How investments are scoped and prioritized

• Factors used in project selection and business case

• Balancing new application investments with maintenance activities

• Use of application road maps to guide project decisions

Managing project performance and service levels • Replanning and approval of projects whenever requirements change

• Tracking actuals to plans for both business benefits and IT costs

• QA practices to improve quality

• Use of IT service catalogs to align costs and service levels

Maintaining business alignment and satisfaction • IT-business interaction model

• Roles and responsibilities of business relationship managers

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