In today’s business climate, everyone understands the need to shorten the time to act on business opportunities or react from industry threats. IT is a critical tool to help support business strategy. Unfortunately, IT investment and implementation is not always aligned with the business needs.
The most important aspect an IT manager or a CIO has to consider whether the IT infrastructure or the purchase reflects the organization’s service focus or delivery. One of the important IT purchase decisions is whether to develop in house or to go for outsourcing. And most importantly, how much value the purchase or the IT infrastructure can put in the organization.
This is a simple math, if the cost is controlled, profitability increases. When IT is creating less value, this is important that the investment decision on IT has to be made very precisely and carefully. CIO has to remember that investment decisions on IT requires Total Cost of Ownership (TCO), considerable amount of Return on Investment (ROI) and needs to exhibit the business value of IT. A software can be developed with every important features, may have huge budget on data control, backup, security, may purchase the best server in the market but at the end, these are all business investments, not an asset to an company, as IT is deployed to enhanced the business processes.
CIOs/IT Managers needs to remember that IT budget is not their toy budget. This is serious investment requiring ROI and justification.
According to the CIO Magazine’s “The State of the CIO 2007” survey, IT ventures aligned with business strategies has enabled the CIOs to create the new revenue stream twice than the CIOs who did not align IT with business focus. The survey has also clearly distinguished the success of the CIO to create competitive advantages over the unaligned IT and Business strategies.
This is evident that the independent IT objectives not focusing the business strategies need to be changed. The IT Managers/ CIO has important role to play to develop IT strategies aligning with the business focus, whether it be growth, building brand loyalty or entering new markets. This will increase chances for a CIO to ensure increased ROI.