Beyond the numbers - why IT effectiveness is not just about counting costs

Beyond the numbers - why IT effectiveness is not just about counting costs
25/05/2004

By Brian Hendry, Senior assyst Consultant, Axios Systems 

 

This is the wrong attitude. Managers need to look beyond the numbers. 

 

The flipside of the coin is that you might be reducing costs but not be supporting the business in the way it needs to be supported. 

 

Of course, you still need to measure costs - indeed, an IT Service Management solution allows you to do this accurately. The tool can enable you to calculate expenditure accurately, not just for hardware and software but on a wider front, including manpower statistics. It can tell you which staff are doing the work and how long it is taking them to solve particular problems. Those work study experts who used to go around offices with clipboards are now a distant memory for most organizations, replaced by computing tools at the service of the computing industry itself. 

 

But you should also be viewing IT effectiveness from a different angle, not solely from the perspective of the cash being spent on equipment and resources. 

 

It is more important to look at things from the standpoint of providing good customer service. It may well be that by cutting costs you are providing a worse service or not satisfying the customer’s requirements. The service which IT delivers to the business is not always the main thrust of IT effectiveness and efficiency - but it should be. 

 

Even if you do get a handle on your costs, this still does not mean you are efficient or effective. The business needs to know it is getting what it wants when it needs it, in a costly manner. An item might be dearer but more cost-effective. 

 

One hears a lot in the industry these days about Return on Investment but that again tends to be an analysis of cold, hard numbers. ROI doesn’t always cover issues like: Is the customer happier? Is he pleased with our service? Are we giving him what he wants when he needs it? 

 

This means asking the customer, perhaps by way of formal focus groups, research surveys or questionnaires. If you don’t ask the question you will not get the answer. 

 

IT effectiveness is not as simple as saying: ‘The budget increase this year will be 0.2% less than our sector’s inflation, so we’re being efficient and effective.’ A far better yardstick is: ‘We are providing a better service to customers, availability has increased. It may have cost us slightly more but the business is happier’. 

 

I’m not making a case for unlimited IT spending but if it gives the business a competitive edge it’s worth investing a bit more in it. 

 

IT is usually not regarded as a revenue generator but a drain on cash so there’s a temptation to maintain a lean and mean machine. This can be valid but sometimes you need to increase costs in order to improve service. The overall IT budget does not have to rise. By prioritizing the business’ requirements you can focus the IT spending on the areas that will benefit the customer most. The available budget should be spent on items with the greatest positive impact. 

 

IT has always been expected to deliver better performance with fewer people so IT directors are constantly under pressure. With software getting cleverer and hardware becoming faster and more powerful, Chief Executives demand these achieve higher results with the same or fewer staff. 

 

Self-service tools such as Web interfaces and knowledge bases can help trim costs by allowing staff to resolve some of their own problems and take some of the workload from the Help Desk and others in the IT department. Systems, however, are getting more complex which involves additional costs such as staff training. 

 

A starting point for IT effectiveness is better communication between IT and the business. They need to sit down and talk to each other, breaking down barriers. Quite often IT puts in place what it thinks the business needs, which can be a million miles away from reality. It’s a two-way process, and the business must involve IT management at an early stage, explaining what it wants and why. The business should divulge its plans. How much does it plan to grow next year? How many extra staff are likely to be recruited? What are the implications for computing services? 

 

Something which IT thinks is important may not be that vital to the business on a day-to-day basis. Issues which IT believes are relatively unimportant may be a crucial part of the business process or life cycle. 

 

Following IT Infrastructure Library (ITIL®) principles is important because they include emphasis on the importance of communication between IT and the business, and delivery of service rather than just hardware and software. 

 

Adherence to BS15000 - the first global standard for IT Service Management - is also very useful. This proves that the IT department has the right processes and documentation in place, and is therefore more likely to be efficient and effective because it is following the right routines and staff are undertaking appropriate responsibilities. This can be another way of saving costs through eliminating duplication and promoting consistent Best Practice. 

 

In addition to comprehending their costs IT Directors need to understand the overall business. Above all they must make sure that the service their department provides matches what the business requires. It may not always be possible to give it precisely what it wants but through negotiation there can be a settlement which leaves everyone more or less satisfied and provides IT with an invaluable understanding of business priorities. 

 

It can help if IT people have worked in other parts of the business. In some organizations the IT Help Desk is staffed not only by technical experts but also by people who have different experience and skills. This can help promote internal communication and the smooth running of the wider organization. 

 

To know where you’re going, of course, you need to know where you are. What does the business really think of the IT department? How mature are the organization’s processes compared with ITIL® guidelines? An organization can either perform its own IT ‘health check’ or call in external experts for an independent assessment. 

 

IT exists to provide a service. If it is not achieving this objective it is simply not being effective - and customers will be left to count the cost. 

 

 

Axios Systems is a leading provider of Best Practice-based IT Service Management (ITSM) solutions. Our customer-centric approach combined with our award-winning solutions, ensure customers worldwide can align their Service and Support organizations with the overall business goals. Our core solution, assyst, intuitively steers users through the ITIL® processes. Axios Global Services provides a range of consulting, project management and training services. Our commitment to Best Practice is demonstrated through being the first to achieve BS 15000 certification which has now become, ISO/IEC 20000, the International standard for ITSM. Axios is headquartered in the UK, with offices across the Americas, Europe and Asia Pacific.

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