10 Aspects of Running IT as a Business

People spend so much time pretending IT is a separate entity from the business. CIOs might as well take an optimistic spin on that notion by running IT with a business mentality. In an article for, David Chou details 10 items that factor into managing IT like a business, inspiring greater success along the way:

  1. Starting with the right philosophy
  2. IT budgeting
  3. Investment planning
  4. Chargeback/show-back
  5. Benchmarking
  6. Cost optimization
  7. Performance metrics
  8. Clearly defining IT processes
  9. Communicating successes
  10. Aligning with corporate strategy

Make IT Turn a Profit

The right philosophy is the one in which the CIO thinks of him or herself as the CEO of IT, where profits and losses must be at the forefront, but there is also a drive to deliver the best possible service to customers. Businesses that cannot budget sink, so CIOs should get serious and imagine that equal risk comes with maintaining the IT budget. With this mentality in place, IT can think about its investment planning. The greatest weapon in the arsenal of investment planning is the project portfolio, so make sure its information is transparent and really covers the full spectrum of costs connected to projects.

Chou continues to say this about chargeback/show-back:

While this is a much-debated practice in business, proper chargeback practices can better align IT with business goals, enhance demand management, provide justification for IT costs, and increase IT financial transparency. The most businesslike approach to chargeback is to use service-based pricing, because it expresses IT services in business terms.

Next up is benchmarking, which allows one to both measure performance over time and across departments. Benchmarking allows more transparency and new insights at a relatively low cost. And speaking of costs, the task of cost optimization should not be isolated within IT. The rest of the business should get involved in deciding how much service it must really demand of IT.

When it comes to settling on performance metrics, go for ones that directly pertain to deliverables. Those tell a more pertinent story of health than things like system availability. Since the ultimate goal of the IT organization is harmony with corporate strategy, metrics should reflect this ambition.

For even further elaboration, you can view the original article here:

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