Most business budgets and expenses operate on a cost-benefit basis. If a budget for a new office is allocated then a shiny new office is expected. But what about IT? Do we really know what we get for our money? It’s time we had a better understanding.
In many enterprises IT is responsible for supporting tools used to account for other areas of the business like HR, business projects and financials. It stands to reason then, IT would have a good understanding of how well its own budget is accounted for. This is more complex than it seems, but there is definitely a clear case for improving the situation.
IT for operational support versus IT for new business
A significant portion of IT expenditure is allocated to supporting operational systems or “keeping the lights on”. In this sense IT is seen as a cost centre as the overall business relies on it functioning properly in order to generate revenue.
In the age of digital business treating IT as a cost centre is like a transport company viewing is fleet of trucks as a “cost centre” and is about as meaningful as saying “the whole business is a cost centre”.That same transport company could develop a mobile app to facilitate ordering by customers. In this case money would need to be spent on IT, but the new business benefit can easily outweigh the cost.
That being the case, we should still be proactive in determining the value delivered back to the business resulting from any form of IT spending.
ITaaS makes costing clearer
Adopting an IT-as-a-Service (ITaaS) model can help decode “how well” IT is spent for both operations and new business.ITaaS encompasses the cost to deliver a well-defined outcome. For example, an in-house IT department or a third-party managed service provider can deliver a unified communications system on a per-month, per-user basis with all the capital and integration costs factored into the price.This approach provides a direct comparison between different technologies and benchmark the business can use to assess its ROI.