Leadership Strategies

IT As A Value Adder Instead Of A Cost Center

Ways to make IT seen as a customer focused, high quality face of the organization.
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Organizations regularly complain about the cost level of their IT department. This is by no means a new phenomenon. At IDC, we continuously assist IT managers dealing with challenging cost reduction targets. I find that these cost reduction targets are often determined bluntly, and IT departments have trouble in demonstrating their true value to the organization.

Run and Change: Commodity and Adding Value

The first step to take is making a well-considered distinction between the ‘run’ and ‘change’ parts of the IT budget. In other words, appreciate the difference between keeping the automation of the organization running and enabling the organization to innovate.

  • The running of the automation should be the subject of continuous cost saving projects and optimization. Regular benchmarks and a fitting sourcing strategy are important tools to optimize this part of your IT.
  • On the other hand, we have ‘change’, the innovation. This is where the strategic added value of IT lives. The added value is often found in software development, allowing for digitization of certain process to save cost in the primary functions of the business or to innovate in other ways, such as bringing new products to market faster.

But what are other ways for IT to shine within the organization?

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User Satisfaction

Another way to present IT as an adder of value instead of a cost center is through user satisfaction. In nearly every IT procurement project guided by IDC, user experience is a major theme. Key steps to take in improving user satisfaction is through simplifying technology and improving user IT practices. These practices like self-service portals, instructional videos, FAQs, and user training improve user self-sufficiency through automation and education. Our benchmark data teaches us that successful implementation of these practices can have spectacular results on both the service desk workload and user satisfaction rating.

Consider the Employee Instead of the User

After implementing these practices, which many organizations have successfully done, an IT organization has the opportunity to engage the employee to add more value during their time with the organization. Yes, we have now transitioned from user satisfaction to employee satisfaction. After all, a user is more than a workplace account. Cooperation with other supporting functions of the organization, such as human resources, becomes an opportunity.

Employees are motivated by more than salary and vacation time. The feeling of purpose and corporate social responsibility are crucial factors for many employees to really connect with their employer and experience satisfaction in their careers. In the work from home climate that we have experienced since early 2020, this connection is at risk.

“In nearly every IT procurement project guided by IDC, user experience is a major theme.”

The logistical processes of the IT organization can play a cost-efficient role in engaging the remote worker. To supply offices with the right hardware and services, IT knows logistical services such as ‘on-site support’ and ‘IMACD’ (install, move, add, change, dispose). During the pandemic, these services have modified somewhat for some organizations as many workers changed their work location. Especially now, these logistical processes allow the organization to engage their remote workers. Take, for example, the onboarding of new employees. When IT delivers the required hardware, why not integrate with HR and include a handwritten note from the manager and overviews of the company culture and mission. With some real attention and coordination with other departments, IT can deliver a warm and welcoming experience at no additional cost.

In summary, if the cards are played right, IT can be seen as a value adding function instead of a cost center. The logistical processes are already in place to position IT as the customer focused, high quality face of the organization towards the employee. If a transparent dialogue between IT and the rest of the organization about the cost level is also in place, the relationship is bound to become value based instead of cost based.

The first 90 days on the job are crucial. IDC’s checklist for building a foundation for Application Portfolio Analytics and using fact-based metrics will help you elevate and establish yourself to be as effective as you need to be.

Diederik is an experienced IT management consultant specialized in benchmarking and information management. For IDC Metri, Diederik is active in the fields of benchmarking, sourcing and management consulting. By combining the functional and the technical, Diederik is able to help IT managers make the right decisions through benchmarks and detailed analyses.