As we enter the era where robots may replace humans in the IT industry, there is a consistent buzz around automation, effort reduction, and proactive measures. While CIOs are doing the right thing by focusing on Year-on-Year (YoY) savings, the moot question is, if the cost savings approach is the right measure to focus on. CIOs should have continuous focus on operational and business management processes that can help drive and capture the primary requirements needed to satisfy the objectives of the business and end users. They should ask pertinent questions, such as – will technology adoption help in growing revenue, in customer acquisition, bring down long-term IT costs, and above all, react to the ever-changing market conditions. Further, they need to identify the use cases and define the consumption model for each IT request from within their organization. As IT planning further evolves, there should be a shift in not just the delivery by vendors, but also in the consumption of IT and in Service Level Agreements (SLAs).
It can be argued here that that the saved dollars can be reinvested to build new features. However, this argument alone does not present the complete picture. Such an approach does not consider rationalization and continuous improvements in business processes and the resulting improved end user services. It can be safely said that the positive impact on the end-customer delivers far more value to a business than YoY savings. IT service providers working towards continuous improvements to business processes will mean a dramatic shift in the thought process on how services are eventually delivered. This can happen only when IT organizations and IT service providers are talking about business outcomes or Key Performance Indicators (KPIs) which the business teams are generally measured on.
A holistic approach that few companies are beginning to adopt is to put business outcomes in the forefront right from the start of IT deployment. They are also mapping IT service levers and their impact on business KPIs, defining end goals and innovative methodologies for continuous improvement. Few examples, Imagine there is a system issue in the claims processing application and there are few claims that are stuck in the process – A support engineer should focus more on clearing high value claims on top priority than a low volume claim as the time taken to pay out a claim has a direct business outcome linked to customer satisfaction. Similarly in the payments industry, imagine a set of users who have completed the transactions to transfer the money. However, if few transactions are stuck because of a system issue, the support engineer should first focus on resolving the issue related with high value transfer amount because a delay in processing high value transactions causes severe financial constraints on the customer.
This is precisely the reason why every IT service has to get onto the bandwagon of measuring itself on business outcomes and throw IT SLAs out of the window. Few IT service providers have already begun to implement proprietary framework in some of their engagements to show a differentiated value by mapping their goals to the clients’ business outcomes and making IT SLAs irrelevant. Another tremendous advantage of mapping the IT service provider goals to the business outcomes is the proactive approach that service providers are forced to take. At Virtusa, we have made a paradigm shift in our application and infrastructure support services to move from reactive to preemptive methods.
In conclusion, moving away from SLA driven mindset and adopting business outcomes as measurement model by service providers will provide immense advantages to enterprises. This is a step in the right direction for service providers to be more preemptive in every aspect of the software development lifecycle. In the same breadth, in order to maximize the benefits of IT deployment, IT planning must also take cognizance of the overall business outcomes.
The article was originally published on Dataquest on November 03, 2015 and is re-posted here by permission.