Inovus Intelligence - Insights on IT Alignment                               November 2015

How Much of Your IT Infrastructure Has Untapped Revenue Potential? 

When it comes to IT organizations, the use of the yearly allocation and interdepartmental charge-back to fund technology investment has been replete with problems. Fueling “I’ll do it myself” thinking across departments, which are inclined to spend resources only to meet their own technical needs, this model can cause a disjointed approach to IT investment, undermine participation in (and contribution to) needed enterprise technology upgrades, and make it difficult to institute systematic or fundamental changes across the organization.

Strategic funding of information technology is proving to be far more effective in helping an organization to increase its technical capabilities while reducing its costs. When led from the top, this process can involve the entire organization in a thoughtful investment in infrastructure, equipment, and applications. Getting this level of buy-in from leadership can be hard for the IT department, however, and it is complicated further when it is difficult to describe the direct value (ROI) or connection of new technology to the organization’s productivity gains.

IT departments often must be creative in proposing compelling IT funding plans. One successful strategy for funding IT has been to leverage collegial relationships or business partnerships to enable the sharing of resources — infrastructure, business applications, and technical expertise. Often, the framework for such alliances already exists in another form of collaboration, such as a consortium of colleges or a network of healthcare facilities. In other cases, it is necessary to forge a new relationship. In either instance, the IT department must be engaged in developing the relationship and any IT-focused resource-sharing partnership stemming from it.

As a facilitator of this partnership, an organization can recover costs by offering access to resources. These may include extra data center capacity; shared use of a business application, typically supporting different organizations or facilities on different nodes; or the expertise to operate and maintain one of those technical resources.

With this model, the facilitator can transform IT into a valuable internal resource with the capacity to generate income, and the tenant can gain economical access to robust facilities or technology. In either case, these resource-sharing partnerships require high reliability, and as financial agreements, they must be structured and formalized like any other contract. And, like other technology agreements, they benefit from the input of the organization’s IT vendor, which can provide guidance as to how the partnership can best serve the organization’s long-term technical and financial goals.

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