For decades, companies treated the IT system as a cost center not much different from facilities maintenance. The job of IT was to keep the lights on, ensuring that the technology a company used worked and that the costs of keeping it working were kept under control. Those days are well over. Not only is technology an operational necessity, but everyone now recognizes that the way companies strategically use technology—whether they buy it, rent it or build it—has a direct impact on company performance. This goes beyond efficiency. Technology is key for everything from customer acquisition and engagement to competitive differentiation and advantage.
As it turns out, however, not every company has been able to rethink and reconfigure its IT system to meet these new demands. That’s not surprising. Not only does this require a mindset shift from the C-suite on down, but it also requires restructuring the IT function to ensure it supports business objectives in a consistent and measurable way.
While transforming IT from a cost center to a profit center can hardly happen overnight, there are three things that any company can do to turn IT into both a business enabler and a business driver.
1. Establish Full Transparency Over Your IT System
A mission-critical IT system needs to have a thorough understanding of what the organization’s IT landscape looks like. Spending money on duplicate applications and unused licenses is a waste. Unknown SaaS applications pose a persistent security risk. Optimizing spend and improving security are table stakes for business-enabling IT.
The fact that anyone in a company with a credit card can subscribe to a SaaS service is the main challenge. Effectively tracking down all SaaS applications and licenses, along with monitoring SaaS usage, can’t be handled manually. What is needed, as with other tedious tasks, is automation. For example, by integrating a SaaS management platform (SMP) with SSO and expense management solutions, organizations can automate the discovery of SaaS. When the SMP also integrates with the primary SaaS vendors companies rely on (Microsoft, Google, Salesforce, etc.), it allows organizations to keep track of usage.
The goal here isn’t for a centralized IT function to exercise more control over the software used by organizations. Instead, the goal is leveraging automation strategically to produce the kind of data-driven insights that allow organizations to make better, more informed decisions about the technology it uses.
2. Promote Engineering Efficiency
All companies today are software companies. This means that the engineering function needs to be thought of us as part of the overall IT estate. Not only does the IT system need to support engineering as it would any other business function, but the technology created by engineering itself inevitably becomes part of the broader technology landscape managed by IT.
Mission-critical IT supports engineering efficiency in at least two ways. First, IT should provide the tools and capabilities needed to drive engineering efficiency. For a long time, measuring the efficiency of engineering was either not done at all or was based on meaningless vanity metrics such as lines of code. Recently, DORA metrics have emerged as the scientifically validated method, widely trusted by engineering teams themselves, for tracking efficiency. IT needs to enable easy tracking of these metrics.
IT should also facilitate the creation and maintenance of a service catalog for engineering teams. Maintenance of this catalog not only promotes the reuse of services, itself a hallmark of engineering efficiency but also makes it possible to quickly mitigate security issues associated with microservices (Log4j being just one example from the last 12 months).
Beyond efficiency, however, IT can also support in-house software creation by helping engineering teams with value stream management so they can track the business impact of the software they create. While efficiency can have a business impact (realized through time/cost savings), software drives the business forward when it effectively meets customer needs. IT can facilitate these insights by connecting the dots between customer feature requests, product changes and increased adoption (of products and features).
3. Make Enterprise Architecture Strategic
An IT function serving as a mission-critical part of the organization cultivates a comprehensive overview of the software landscape and supports engineering efficiency, as suggested, by viewing the development environment as an integral part of the broader technology estate. However, IT system leaders need to do something more to effectively collaborate with the business leaders and drive the business forward.
Specifically, IT leaders need to provide the business with insight into all the ways technology influences business performance. This means highlighting risks that need to be addressed, uncovering opportunities that should be pursued, and suggesting options for future planning. Thoughtful and strategic enterprise architecture management here is the key.
A strategic approach to enterprise architecture management means focusing less on governance (who gets to use what) and more on reducing complexity to promote agility and quick decision-making. The first step in this direction is the adoption of a common language that aligns the business and IT. Business capabilities and the creation of business capabilities maps for different departments serve this purpose.
To make decisions about technology, business leaders need to know what they are working with. Reliable and current data is essential. For this reason, your enterprise architecture management needs to prioritize ongoing data collection and the maintenance of data quality.
Finally, to make objectives and options transparent, IT needs to be capable of strategically displaying all enterprise architecture data in a way that can be easily understood and acted on.
Where Do You Start?
Taming an unruly SaaS landscape, making it possible to build better software and guiding technology strategy are all easier said than done.
The good news is, ongoing innovation has created solutions that are easier to use, effectively leverage automation and integrate with all relevant systems. In other words, the tools are there. All that’s needed is the commitment to transforming the IT system and developing it into the critical business function it can and should be.
