Key Measures of IT: Business Value, not Costs

Dateline: September 27, 2013

Welcome to our Friday WRAP – one thought-provoking idea to think about over the weekend.

In a recent interview of Michelle Bailey, vice president of datacenter initiatives and digital infrastructure with the analyst firm 451 Research, CIO Insight shared her views of what IT leaders ought to be focused on these days.  Bailey suggested that IT organizations have difficulty being viewed as something other than a cost center because we measure, and discuss, the wrong things.

IT probably does the worst job of any business unit in terms of measuring itself.  IT usually measures infrastructure and IT costs, and because it focuses on costs, it is viewed as a cost center. The metrics you should be thinking about are business availability, time to market, application deployment and security. We rarely see IT organizations that can measure their contribution to revenue or shareholder value. The future CIO will employ portfolio managers who think like a financial analyst and not just about costs but about business risk and reward. They’ll think in terms of projects that increase competitiveness, as well as drive business value, such as improving customer satisfaction. They will think more like a broker of IT services that will have clear rules of engagement for business users.

What do you measure? Do you focus on operational metrics or business-value metrics?

That’s a WRAP! Have a nice weekend!

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