by Meridith Levinson and Richard Pastore

Transparency Helps Align IT With the Business

Jun 01, 20053 mins
Business IT AlignmentIT Leadership

When it comes to changing the perception of IT’s value in the business, transparency is a fundamental first step. Substandard IT departments happily hide behind a veil of opacity. They don’t want the business to know what they’re spending on IT, what performance levels IT is meeting (and missing), or how project success rates are trending. But any IT group intent on turning doubters into believers must court IT performance visibility. CIOs can’t assume that success speaks for itself.

Transparency is open-book IT management, enabled by two cornerstones of any true-believer campaign: measurement and communication. With transparency, business players see what they are consuming from IT—in services and products—and know how much it all costs. They know what customer service levels they’re receiving and whether IT is meeting its promises. And they know the state of their projects in the pipeline. It’s all there, accessible by managers from the CEO on down. It’s also front and center for the whole IT staff.

Transparency liberates the CIO. When someone asks what IT is doing with all that money, the CIO won’t have to panic. Open a page on the intranet, click on the Balanced Scorecard report or the service-level dashboard or the chargeback records, and you’ll have your answer. In fact, the CIO can reverse the question and ask, What are you doing with all that IT?

Transparency of IT costs and services evens the scale for internal IT departments. Outside providers know what they can provide at what cost, giving them a competitive edge over an internal IT department that lacks such knowledge. A CIO who knows costs and service levels cold can fight back and win.

But transparency isn’t just about self-preservation. When service levels are set, tracked and reported to the enterprise, the IT staff mind-set becomes customer-focused rather than technology-centric.

Financial visibility can also make better IT investors of the business users. When the head of marketing gets a monthly bill itemizing costs for applications, storage and other IT consumables, she better appreciate the costly, limited resource that IT really is. The business will share accountability for IT usage, which can lead to more prudent IT investments on initiatives that truly align with business goals.

Transparency changes the rules, benefiting both the CIO and the business.

There are many tools for cultivating transparency. In the following case studies, we’ve chosen to focus on three of the more controversial and complex: internal service-level agreements (SLAs), chargeback and the Balanced Scorecard. SLAs make IT performance transparent to users at Hines (see Hines’ sample SLA); Chargeback provides IT with financial visibility at Southern Company; and the Balanced Scorecard does a bit of both for BNSF Railway. All three tools are difficult to implement, cost time and money to sustain, and have potential political ramifications. But if deployed well, companies will lift the black curtain obscuring IT, ignite the bright lights of transparency and set the stage for a better perception of IT’s value.