I’ve posted before that realizing value from IT-enabled business investments requires both a partnership between IT and the business (duh!), but also a partnership between the CIO and CFO. This can provide the credibility and linkages necessary to ensure that meaningful metrics are defined and tracked, and that accountabilities, both for costs and value, are identified and taken seriously.
Is Finance Your “Worst Offender” in the IT “Value Leakage” Stakes?
So, yesterday my colleagues and I were working with a global manufacturing client. We were sharing some of our latest research into Managing IT During Recessionary Times, and looking for ways to apply the findings to their specific situation. We were talking about the need to revisit the IT portfolio of installed systems, and work with business partners to do almost a ‘zero-based‘ exercise to re-justify legacy systems. When we have done this with clients in the past, we have typically identified at least 20% IT cost savings by eliminating legacy systems that have been superceded by newer solutions, but that are still kept in the active portfolio, typically because a few individuals “like the reports the old system generates” and have not taken the time to learn the self-service query/reporting tool that came with the new solution.
I mentioned that I have found that enrolling the CFO in this exercise can help provide the “air cover” to get the portfolio “work-out” accomplished, when the client CIO laughed and said, “But finance is the worst offender in terms of keeping redundant systems on the books!” I guess I should not have been surprised. Sometimes, the so-called support functions (e.g., finance, HR, facilities, legal) are not among the most responsible consumers of IT capabilities and assets. Exacerbating this, I often find that the IT relationships with the other support functions are not the most healthy and constructive. Perhaps, the current economic climate is a great opportunity to forge stronger partnerships with the support functions, and take out some IT costs?