Moving IT from a Cost Center to a Value Center (part 1) 
Published: Jan-12-12
 
Welcome to my first post in a six-part series that discusses the value of running IT like a business. Running IT like a business marries the strategies of technology with business to maximize the contribution that IT can bring to your overall enterprise. It’s a way to organize and manage internal IT to reduce spending, increase revenues, manage your workforce and ultimately improve your effectiveness. Operating with that business mindset will enable you to transform your IT department from a cost center to a value center, providing enormous benefits to your department and your company. I’m Bob Kress, COO of Accenture’s Internal IT, and over the next several months I will show you how your IT department can become an integral part of your company’s success. 
 
About a decade ago, Accenture seized the opportunity to transform its IT department when our corporate structure was upended. Steeped in Accenture’s tradition as technology leaders and management consultants, we approached this transition as business people and focused on the quintessential issue: understanding the needs of our internal customers. By partnering with our customers, we began the first step in transforming IT from an expensive cost center to a lucrative value center.
 
Customers and Accountability
 
Over several months, we engaged in numerous, wide ranging discussions and data gathering with senior leaders to learn their pain points, goals and essential technologies. By drawing on the Accenture business strategy, we created an organic and integrated IT strategy that standardized operations, strengthened measurements and provided customers with products that supported their businesses.
 
Establishing strategy is the first step in running IT like a business, followed by creating a governance structure that demands ongoing customer communication and accountability. Structure provides roles and responsibilities for executing strategy, authority for decision making, especially on all-important investment issues, and accountability to ensure IT is doing its job. I recommend structuring IT governance to mimic your corporate governance so objectives are aligned. Accenture is a highly centralized company with a broad global footprint that spans many industries; our IT department structure follows suit. These are Accenture’s key governance roles:
  • The IT steering committee prioritizes funds for IT investment; it includes chief operating officers of all business units
  • Sponsors who are stewards of business capabilities, including processes, people, and technology
  • Business stakeholders who own opportunities representing changes in business capabilities
  • The CIO and the IT organization, which includes all executives who will be held accountable for IT capabilities
  • The Accenture Global Management Committee

Synchronizing IT strategy and governance structure with organizational goals can unlock the powerful value that technology brings to an enterprise. That’s a point I make in my book, Running IT like a Business: Accenture’s Step-by-Step Guide, which explores the dramatic results Accenture has achieved from running IT like a business. In my next post as part of this series, I will discuss how investment decisions can satisfy corporate goals and make IT a valuable contributor to your organization’s success.

In the meantime, how is your IT organization learning to create value for your enterprise?

 
 
 

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