Managing IT as a Business – The right Strategy
IT organizations are playing an increasingly important role in creating value for companies and actively shaping business models. XEPTUM’s IT business management approach supports this trend.
The understanding, which is in line with defined business strategies, that IT has to be operated as a business is integral to this.
Many IT organizations take a reactive approach to requirements and simply react to business demands. This approach has become outdated! The underlying cost center mentality puts IT departments on a road to nowhere and fails to address the imminent challenges of digitalization. The IT department has to safeguard business operations and be able to drive and support innovation.
The IT Business Management Approach
IT Business Management (ITBM) enables all functions and processes of an IT organization to be viewed in an integrated layout. The objective is to operate as a commercially viable company, in order to make a valuable contribution to the company’s success.
It is crucial that the processes and functions do not happen sequentially but rather in a synchronized and integrated manner, i.e. they should be intertwined and harmonised like cogs in a gearwheel (‘value adding gears’).
The challenge here is that processes and functions occur on different levels – some of which overlap or are interlinked. The outcome of this is that transparency and interaction are critical for successful and coherent deployment of functions.
We structure ITBM in four areas:
- IT strategy
- IT organization
- Process management
- Technology and systems
The corresponding management approaches are interlinked with these levels and topic areas so that some of them are presented separately.
Consistency and a holistic consideration of all functions are essential for the ITBM approach. By examining management functions in isolation, it is only possible to achieve a global optimum by accident and not in any purposeful manner.
Processes and functions should be intertwined and harmonised like cogs in a gearwheel.
IT Strategy – The Key to Success
IT strategy determines the targeted approach of the various ITBM functions. Of course this should be guided by the corporate strategy, although IT targets can differ from company objectives. As an example, cost savings can be made in departments with higher investment in IT if manual steps are automated using IT tools. In other words, the associated savings must exceed the potential (ideally one-off) additional IT costs (over a defined time period).
Specific IT strategies are frequently absent in IT organizations and the corporate strategy is ‘blindly’ followed. Or IT does not follow any particular strategy and is driven by operational requirements. The consequence is that the IT organization cannot operate in a proactive manner and only reacts to situations. In these circumstances, there should be no expectation of a strategic and active contribution by IT to the company’s success, it may even be an impossibility.
IT strategies are frequently substantially influenced by governance requirements with a focus on criteria such as security and traceability. However, a successful IT strategy requires a corporate vision that specifies precisely what is expected of the IT department in the future.
Service Concept – A Good Approach that offers New Possibilities
IT service management is a good approach and a first step toward changing how IT is organized and perceived. An important point is the focus on the customer, which, in ITSM, is primarily the ‘internal’ customer of the IT organization.
Offering these (internal) customers meaningful and satisfying IT services represents the basis for further developing IT into a value-adding unit. IT and user departments can only develop new business models for the end customer if there is confidence in the capabilities and a focus on the customer. The next-generation IT organization is therefore geared both to the needs of internal customers and to innovative new business models for end customers.
IT service management is a first step in the development of IT services toward ITBM and maximizing performance.
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