Of all the benefits involved in running IT like a business, the transparency of IT costs and value is the most potent. Unfortunately, it’s also the most elusive. Less than half of the 103 CIOs who responded to our survey said they’ve achieved transparency (you can read all about the results of CIO’s survey in this issue’s special report, “How to Run IT Like a Business,” starting on Page 48).
Transparency?having all IT costs, investments and ROI continuously tracked and visible to the entire enterprise?is certainly difficult. It requires a foundation of financial controls, a regimen of measurement and a program of communication that reaches into all levels of the enterprise.
But the hard work is worth it. Transparency is liberating. At Intel, instead of a panicky reaction when businessfolk question how IT is “spending all that money,” CIO and Vice President Doug F. Busch can instantly refer them to the portal that details precisely what IT is working on, what IT is spending, how IT is prioritizing that spending and what the payback is to date. Satisfied?
You can just imagine the Cheshire cat grin on the face of any CIO able to respond to the spending police with that kind of information at his fingertips.
Transparency also empowers IT and business leaders to manage costs together to curtail unnecessary IT consumption. USAA, which runs IT as a subsidiary business, teams IT “product managers” with line of business leaders to actively manage down technology consumption. For example, USAA’s assistant vice president for banking systems noticed that the banking business unit was shelling out money for 1.16 PCs per employee, while the property and casualty business was managing fine with just .96. Together, IT and the bank devised a way for part-timers and shift workers to share desktops, dropping the bank’s PC consumption and saving $2 million per year.
Yes, achieving transparency requires a lot of effort. But it also requires courage?and this may be another reason why it’s so elusive. Transparency exposes both the good and the bad about IT. Superefficient, well-aligned IT departments have no fear of transparency?they welcome it. But the rest are anxious about it.
The best answer I’ve seen for this natural reluctance comes from a CIO who values transparency even though his IT shop is not perfect?Robert Urwiler of Macromedia. “Your flaws are exposed. The opportunity is there to fail miserably and be very visible,” he says. “But just like when you’re running a business, you have to find a way to explain things that don’t go right. And in the end, you find, the business appreciates being told the truth.”
For me, this is the choicest bit of wisdom in the special report that follows.
Our special report on running IT like a business continues online with an IT as a Business Profiler, a Reading List, samples of annual reports, brochures and catalogs from IT “companies.” Find it all at www.cio.com/ritlab. (In case you’re wondering, “RITLAB” is our acronym for Running IT Like A Business.)