Reorganize the IT to Become Business Oriented

After my post Blueprint - Successful IT Organization, I received emails that this is utopia and is very difficult to implement. Supposedly, corporations just look at IT is a "spender of money". In this post I follow-up with a suggested process which will convert IT department into a respected business unit.

It is in the human nature to deem everything as waste of money unless they can clearly see the benefits they get from it. For instance, the electrical windows in my car are a waste of money! No, wait, they let me focus on the driving and have both hands on the wheel instead of cranking the window up or down. Oh, so I have a benefit there. I better buy them.

The very same goes for IT. In the current technology savvy world, everything in IT is observed as pure commodity, that just happens to work. IT is only a utility service, much like water and electricity.
So IT needs to properly position itself and present what is actually needed for the companies utilities it provides:

  • Document your services to Create a service portfolio - follow the ITIL v3 standard and document the services you plan, implement, and support like:
    • PC maintenance
    • CRM Systems
    • Email service
    • Remote Access
    • Helpdesk
    • Disaster recovery
    • etc.
  • Identify the assets and resources of each service - list all resources required to operate the service. This will include:
    • hardware
    • software
    • licenses
    • documentation
    • human resources
    • external supplier contracts
    • etc.
  • Identify current availability - for each service, identify the level of availability of the service which you can achieve with your currently available resources.
  • Identify current capacity - for each service, identify the capacity of the service which you can achieve with your currently available resources.
  • Identify current continuity ability - for each service, identify the capabilities to achieve continuity in case of problem of the service which you can achieve with your currently available resources.
  • If possible, identify current security ability - for each service, identify the capability to achieve and maintain security of services.
  • Identify operational resources - which resources are at your disposal to provide operational and helpdesk support for services
  • Identify current capabilities to provide additional services:
    • SLA Management
    • Change Management
    • etc.
  • Calculate the current expenditures for each services - enumerate all costs which are required to maintain the current level of service:
    • utilities and physical location costs
    • salaries
    • external services used
    • spare parts stock
    • new equipment stock
    • average overtime costs for employees
    • transportation costs for delivery and maintenance
    • etc.
From the finished Service portfolio, create a Proposed Internal SLA, (sometimes referred to as Proposed Operational Level Agreement, although not quite correctly). Submit the Proposed Internal SLA to the business side.

The simple question in the proposal is: Here is what we can deliver, at this cost. Is it good enough a quality for you?

  • For services that can be individually delivered (PC maintenance, dedicated servers/services used by 1 or 2 business units), each business unit (division/sector) should decide whether the offered characteristics of these services are acceptable for them.
  • For corporate wide services (like network infrastructure or e-mail) the decision should be at a level at which all business units will coordinate and agree.

When the business expectations are collected, perform a review of the service portfolio:

  • For each service match the required levels of quality, with adding the associated costs.
  • If you are depending on external supplier in delivery of service, NEVER Offer a higher level of quality then is stipulated by the service contract. If a higher level is required, first you must negotiate a higher quality with the supplier, and attach the costs to the cost of your service.

When you finally agree to the service level, you will effectively become the service provider within the company.

Using this approach you can immediately start to reorganize your processes to achieve:

  • Improve quality of services
  • Lower costs of delivery
  • Improve expertise of teams
  • The salaries will become less unified and will vary according to work done.
  • Your teams will immediately become accountable for the service they provide.
  • Each person will in effect "earn his own salary".
  • For the IT manager, this will shift his focus to pure business.

There are downsides to this process:

  • The changed processes will create a clean line of separation between the business and IT.
  • Your costs will be directly comparable to the costs of a outsourced IT.
  • It will become easier for the company to outsource the entire IT.
  • The IT manager will be directly accountable, and just as any manager, if not performing will can be easily replaced by higher levels of authority.

The proposed process is a good way to reorganize your IT operations, and to grow into a competitive business minded unit. Some IT managers will be weary of this process, and I can't blame them, it's a big change from business as usual.

But when organized properly the internal IT service can achieve same or better quality as the outsourced one, while still providing the benefits for the corporation of retaining the internal and highly trusted IT.

Related posts

Blueprint - Successful IT Organization

Talckback and comments are most welcome

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