It has happened to the best of us. We think our vision is just fine, thank you, until our annual eye exam. In one fell swoop, we discover that our outlook has been a little blurry. That we were missing the detail, the fine print, the leaves on the tree, and who knows what else for who knows how long. With the right prescription, the world looks remarkably different.
A similar myopia is clouding the vision of the best and the brightest CIOs. Although they believe they have a comprehensive view of their IT organizations, their field of vision is actually limited. There’s no predefined list of services, no real view of individual business unit consumption, and no way to tangibly communicate the impact of budget cuts on service delivery—much less the integration time required to onboard and maintain a new piece of software.
This lack of clarity is more than an inconvenience. It’s a handicap—a barrier, preventing entire IT organizations from moving from cost-centers to business enablers. Yet, many CIOs charge blindly ahead while the business partners they support continue to see what they want to see.
So, what about you? Is your IT vision 20/20 or are you suffering from tunnel vision? Take this self-examination and find out.
Take the IT Vision Test
No dilation necessary. Just take a deep breath, blink twice and answer “true” or “false” to the following five statements.
- When budget cuts roll around, I am constantly asked to “take one for the team,” giving up 10 percent, 20 percent of my budget or more, while my peers keep their cost centers intact. After all, I have no real way of showing how those cuts will impact quality of service. Everything’s allocated in one big bucket.
- Almost all of my business units want their applications to run 24/7, with 99.9 percent uptime. I know that’s not necessary, but I can’t really tell them the cost or business impact of running them any other way.
- I typically find out about the new software my business units have purchased when I get the call to “make it run.” Yet, I have no good way to quantify or articulate the immediate impact on support and service, or more importantly the long-term ramifications.
- Everything is top priority, determined by the person who is screaming the loudest. Meanwhile, my staff has little time for innovation or anything that would add real value to the organization.
- My IT department carries all of the accountability for consumption but none of the power, and I can’t see how to change that mindset.
If you answered true to at least three of these statements, your IT organization could be suffering from tunnel vision.
The remedy? A little clarity for both you and your business units in the form of an IT service catalog.
Seeing is Believing
The concept of an IT service catalog is not new, but its significance has changed dramatically over the years. Essentially, it is a documented statement of work—a menu of services provided by IT to the business, including those delivered by outsourcing providers.
On the most basic level, it identifies:
- What services are offered, defined in basic, everyday language
- What choices the business unit has in procuring the service
- What support or additional services “go with” the service
- What elements that make up the service cost, and whether those costs are fixed or variable
In addition to this service inventory, the service catalog could include a demand model, which identifies demand by business unit, and a cost model that indicates the end-to-end IT expense associated with these services.
All of this data works together to give CIOs and IT managers a way to articulate IT in terms of business value and impact. For example, with a service catalog in place, if the CFO asks you to cut budget, you can tangibly show how those cuts will impact delivery to specific business units. Not only does this increase your negotiating power, but it quickly builds alliances with your peers, because now, your cuts impact them.
The service catalog also enables IT to clearly define the services you provide, so your existing team can focus on improving quality, reducing costs and enabling the new style of IT, instead of constantly running to add more, more, more—often without justification. Instead of being all things to all people, your department delivers what is really required to run your business. So, you have the opportunity to optimize, streamline and create a true, world-class operation.
Most importantly, this document is the catalyst for conversation. When business units understand the costs associated with that 24/7, always-on availability, your peers may rethink that perceived need and opt for less expensive options. When they see the eight things IT has to do to support the new, bright, shiny software they licensed on a whim, they may rethink the purchase—or at least call you for advice before the P.O starts rolling through the system.
You can challenge your business units to help you manage cost; you can share accountability with your peers. At the very least, you’ll enable your entire organization to understand what IT does, as well as the associated costs and timeframes required, with total clarity.
Focus Where You’ll See the Greatest Benefits
So, with all of these benefits, why doesn’t every IT department have a service catalog?
For one thing, many CIOs are slow to embark on a project of this scope without a hard, measurable ROI. However, the soft benefits—the visibility, the control and improved colleague relationships—are extremely beneficial, if not critical to IT’s ability to conduct business. Wouldn’t you rather focus your resources on projects that add value instead of continually reacting to something someone needs or integrating some rogue software that should have never been purchased?
Some CIOs and industry consultants believe that service catalogs have to include a charge-back model to be effective. Nothing could be further from the truth. The real goal is changing business partner behavior, not overhauling your company’s internal accounting model.
But, the biggest reason comprehensive service catalogs end up on the backburner is very simply, time.
While it’s true that taking on a project like this can be a monumental task, you don’t have to do it all to be effective. Focus your initial efforts where they will have the greatest impact. For most companies, that means applications.
Your internal business partners understand applications because it’s what they touch, feel and see every day. Because they don’t see the hardware, understand the security or manage the network, they take these things for granted; just like they take for granted that, when they flip a light switch, the overhead bulbs will come on.
But, when you talk about applications, everything changes. Most IT consumers have a sense of ownership around the software they’re using. They understand how it works or, at the very least, they can articulate those applications’ value to their day-to-day functions. So, once these business partners understand the fact that they personally drive the need for a specific technology and the resources you allocate to provide that specific technology, finding ways to control costs or reduce service levels to conserve resources become easier discussions.
This data is typically enough to change the way your company approaches, thinks about and requests help from IT.
In short, you don’t need to start with bifocals when a pair of readers will help you see the fine print.
Your Next Steps Are Clear
If you don’t currently have a service catalog in place, it’s time to start the process and reap the rewards:
- Increase Visibility: the ability to clearly articulate what is being delivered with the allocated budget.
- Plan: after you‘ve identified where your dollars are going, you fully understand your cost drivers. This information is your secret sauce when annual budget planning time rolls around.
- Optimize: once you understand the cost drivers, you can identify opportunities for optimization, including the elimination of redundant or underutilized services.
- Shift Accountability: by identifying an IT service’s cost, where it’s used and how it’s used, you shift budgetary accountability from the IT organization alone to one that’s dispersed among all of the consumers.
HP has the tools to take the complexity out of your service catalog creation. Our applications pricing model provides the application level costs needed by IT to build the foundation for an accurate services catalog, providing the transparency to the cost drivers as well as the flexibility to throttle the services. Combining this with the ability to trace costs for other catalog items, like hosting, network, storage and service, CIOs can establish an accurate cost of ownership for each business application, which can be measured over time.
It’s the 20/20 clarity CIOs need to run a more effective, cost-efficient IT organization, all delivered with eyes wide open.