Why run IT as a business? Because running IT as a business changes the mindset of technology as a support function and positions it as a catalyst for innovation and transformation.
You might regard the place where you and your information technology teamwork as just another department, akin to marketing or human resources. But it actually makes more sense to think of IT as running a business.
That shows forward-thinking, to figure out a way to best manage your scarce assets. From limited human resources to round out your team, to working within a strict budget for software, technology and training, to dealing with potential disasters such as hardware failures or data breaches, these processes and more will come together better when they’re administered as if you are running your own business.
Unfortunately, “IT executives have always struggled with communicating the value of IT to their business users,” noted CIO. “The challenge is how to translate the cost of technology (servers, people, data centers, etc.) into actionable and data management that businesses can use to make insightful decisions leading to measurable business outcomes.”
But you can get by just fine with your advanced computer training, with no need to possess a full-fledged MBA to run IT as a business, as long as you adjust your mindset and consider the needs of your customers when delivering information technology services.
Run IT as a Business: A Shop within a Shop
When it comes to running IT as a business, CIOs would be right to want a definition of the scope of activity. EY says that running IT as a business involves having a clear mission that describes the benefits of each line item in the IT department’s budget. Furthermore, you must connect your abilities and capacity for work to the various service demands within the enterprise.
Charging for IT services must be done with clear terms like in any other business transaction. You aim to link what you spend and what value is delivered. So according to EY, “Reprioritization and reallocation of spend (to support in-year changes) are possible, with clarity on the impact and opportunity costs.”
It’s incumbent for IT department heads to emphasize transparency in costs, demonstrating what all the IT costs are for software and hardware as well as support and licensing fees. Then, record how much service users are receiving and what it costs the IT department to deliver them. This allows you to provide detailed costs for the different levels of service you provide.
You should also prioritize making clear the value your department delivers, tying service levels to descriptions of what different business services cost, with key performance indicators, used to make IT accountable for what it delivers (or fails to deliver, as the case may be).
Throughout, you will be evaluating any IT spending that is either not performing as expected or is not being used as much as anticipated. This might lead to a reframing of the mission as well as the strategy to deliver newly prioritized IT initiatives.
Steps to Take for Running IT as a Business
Running IT like it’s a business doesn’t mean creating an actual business, of course, or creating an actual protocol for directly charging “customers” for services. Rather, it’s about considering what you do in information technology as it relates to building business value and optimizing outcomes, according to ITSM.
You become a technology and software “partner” with the company that thinks about things from a business perspective and not just as a technology enterprise.
- Ongoing Research and Development: You cannot rest on your past achievements. Information technology systems eventually become old and then obsolete, as manufacturers either abandon hardware and stop supporting it or create new software that needs a system upgrade. So you and your team will need to stay on top of current industry best practices as well as advances in computer technology. Finding an innovative technology that saves your enterprise time and money may mean the difference between the company having to close down or expanding as you gain more market share.
- Demonstrate Business Savvy and Financial Expertise: You may not have much background and expertise in running businesses, but you can still educate yourself about what it costs your department to provide one service as compared to another. Learn about what departments are consuming the most IT services, and see if those needs could be met more cost-effectively. When you can articulate the true value of your services, you can then give better guidance in using them as well as allocating who gets what service when.
- Plan and Strategize: Being aware of what software and technology offerings can do to support the company’s mandates is essential for any well-run IT department. You’ll identify and then present ways where technology can help the company become more efficient, or to add a new level of service to customers.
- Clarify Who Is in Charge of What in IT and What They Do: Make it crystal clear what the responsibilities and mandates are within IT, such as who makes the decisions on issues, and what the department priorities are (as well as monitoring for changes in priorities, such as budgets being shifted).
- Showcase Your Products and Services: If you don’t make explicitly what kinds of services, software and hardware you make available to employees, they can’t make effective use of the available tools. When marketing wants to upgrade its customer management relationship system, you can identify what current options are available, including license fees and how to get training for employees.
- Improve Your Marketing Outreach: Your “customers” inside the enterprise can’t always be expected to come to you with service requests that they can spell out in understandable terms—they may not be familiar enough with the equipment or operating system to determine what they need help with. Devise a catalog of services offered, showing what to expect and how the service helps a worker in his or her department. You can publish updates about service offerings via email or on your company’s messaging system.
- Emphasize Customer Service: You might have a monopoly on IT services (or near-monopoly if some of the work is outsourced), but that doesn’t mean you can tolerate poor service absent competition to keep you in check. Make sure your help desk or service dashboard is intuitive and easy to use. Explain the timeframe for getting responses to tickets of various urgency levels and iterate how users can provide feedback.
Selling Services Like Selling Food
When Craig Williams came onboard Ciena Corp as their CIO, he realized that a “lot of people wanted IT to focus on solving business problems, but they weren’t making the connection that to do so, you needed to run IT like a business.” Search CIO explains that he devised an analogy that compares Information Technology to running a bagel store.
Customers come in at random times and IT’s basic job is to make them happy, and that means breaking down IT into “action service areas” to best parcel out assistance. Williams explained that he met with his network team, security team, and video team and asked them what they did in terms of running a business. “That means identifying what their business does, what their customers want if those customers are getting what they need, what their costs are.”
Serving Your IT ‘Customers’ Well
The more you consider IT as a business that provides a range of services to the “customers” inside your enterprise, the better you get at allocating scarce resources. Of course, part of maintaining excellent customer service involves soliciting and responding to feedback.
It’s a good idea to arrange for surveys, a system for taking in suggestions and other methods to solicit information about the job your IT department is doing and where it could make some improvements. As long as you do your part in keeping the IT up and humming along, you help to ensure that the entire company can not only continue to expand but to thrive, building additional value and becoming more attractive to potential recruits.