A quick review of the 2009 crop of surveys shows that most U.S. companies spend between two percent and nine percent of their annual revenues on IT-related expenditures; making IT a huge investment. Companies are also demanding more than just cost effectiveness, they want competitive advantage from their IT investments. Unfortunately, however, some 45% of companies view their IT as “necessary”―as in a necessary evil―and fully two-out-of-three feel poor quality IT limits the business.
While most business executives agree that IT should be a contributor to cost effectiveness, two-out-of-three throughout North America, Asia-Pacific, and Europe say their businesses are constrained by IT’s inability to quickly adapt to the changing business needs. The global recession and associated IT budget cuts are not helping the CIO’s cause either.
At the same time spending is falling, the demand for IT services is increasing due to the confluence of three important trends: complexity, commoditization, and globalization. The dramatic increase in the complexity related to falling costs and accelerating pace of change is well known. Less understood is that businesses now have less and less tolerance for poor service quality due to their dependence on IT.
Making matters worse, today’s economic climate puts IT organizations under increased scrutiny and IT leaders under incredible pressure to deliver real and measurable results. Another trend that does not bode well for IT leaders is that businesses are uncertain about how they ought manage IT. Many businesses are de-emphasizing senior IT positions by having them report to finance.
The bottom line is that the perceived value and prestige of IT leadership is diminishing; and taking many hard-built careers along with it. Facing increasing demand for services, escalating technological complexity, withering scrutiny and declining budgets, how can IT leaders possibly hope to meet the changing demands of the business landscape, move beyond the image of IT as a cost center, and be seen as an innovator and business enabler?
Business service management (BSM) answers these questions. When done right, BSM moves beyond theory with explicit directions on how to develop targeted action plans that solve specific quality issues. To quote the pioneer of BSM, Peter Armstrong of BMC, “BSM is a mind-set, not a product-set.” BSM is not primarily about new software. How you approach the management of IT is what is key.
The IT environment today is an ocean of uncertainty but there is also opportunity. The opportunity to provide tangible evidence of alignment and move beyond the image of IT as a cost center. The chance to be seen as an innovator and business enabler. You can use the principles of BSM to document customer needs in plain English, for example; measure existing service quality from a business point of view (avoiding technical jargon and operational metrics), analyze the results, and apply practical solutions that allocate your limited IT resources to overcome challenges, seize opportunities, and empower business success.