Market intelligence shows us how our services and costs compare to others. Internal staffers interview their counterparts in other IT organizations; service offering managers interview product managers from vendors and suppliers. The goals are to validate what we are doing right and to identify where we can improve.
Value creation analysis is an objective and rigorous process that helps the IT department understand the value it adds under different sets of circumstances. We use this analysis to determine whether to turn to an external source (a vendor) or an internal source (our own IT shop) when we need something, and to sort out the roles each should play.
Performance measurement and reporting tells us, and our customers (clients and technology consumers), how we are doing. Service levels are driven not only by strategy, but by consumer needs. (See “A CIO's View of the Balanced Scorecard,” by George Tillmann, s+b, Spring 2004.)
We learned from other organizations that culture change is eased by training, not just in the classroom but in the day-to-day interactions with customers and other IT staff. Staffers now know that they must be concerned with service offerings instead of just hardware and software, and that performance will be measured against the customer experience, not just technology use. IT professionals are becoming more conscious of such strategy and management concepts as competitive positioning, price points, disintermediation, and customer segmentation. Segmentation is especially relevant for our newly appointed service offering managers, who are taught to think of customers’ needs and services in terms of our distinct customer segments.
Although our new way of running IT as a business affects all of IT, the majority of the staff members still perform the same functional duties as before. Programmers code and engineers tinker with expensive equipment. What’s different is having a front office where service differentiation and resource allocation are discussed among IT employees and clients, and those discussions influence decisions.
So where are the overhead heroes? In the eyes of clients, they are the for-profit experts who have been teaching us about strategy and governance all these years. And for technology consumers, they are the gurus who understand consumer demand. The overhead heroes have been here all along; we just didn’t know how to recognize them.
Reprint No. 05201
George Tillmann ([email protected]) is a vice president with Booz Allen Hamilton in McLean, Va. He spent his first 17 years at the firm as a management consultant specializing in information technology, and the last five years as its chief information officer.