Cost vs. Value

One of the problems in the past has been that IT people tried to develop financial models without understanding what management was looking for (not to mention limited accounting knowledge or support). As a result, senior management would look at a given analysis and immediately question the report’s credibility by challenging the logic employed.

It shouldn’t have come as a surprise that the business person would have a very different perspective than IT. How many 40 page IT reports to management have wound up unread in the trash because what senior management needed wasn’t understood by the group creating the report? Let me assure you that we have wasted a lot of paper over the years!

My call-to-arms would be for groups to leverage their ITFM teams to not only perform their traditional role but to also help IT work with the business and develop valuation models that management can relate to and agree with.

These financial specialists must help us evolve from a focus on costs to one of value. Perhaps just importantly, we need the ITFM specialists to help IT to learn how to speak in the language of the business, e.g. dollars and cents. Furthermore, we need to leverage their skills to make business decisions and ask ourselves hard questions that we answer before others ask.

George Spafford is a Principal Consultant with Pepperweed Consulting and a long-time IT professional. He focuses on compliance, security, management and overall process improvement.