How to Maximize the Business Value of IT

Featured Article by By Ram Vaidyanathan, Marketing Analyst, ManageEngine

“I don’t need a hard disk in my computer if I can get to the server faster,” said Steve Jobs in 1997.

This has come true, and the time is not far when entire businesses are going to be run from the cloud. Businesses will also use the other arms of the Nexus of Forces — social, mobile and information — to drive employee productivity and deepen customer relationships in the next few years. But a day will come when this will not be enough to compete. Companies will need to use the Internet of Things (IoT) to build innovative business models with smart machines. By 2020, there will be over 30 billion devices wirelessly connected to the IoT.

As technologies move on the Technology Hype Cycle, IT leaders have to make the right investment choices and make their companies truly digital. It is only then that they can integrate IT into business objectives. They will have to be careful about these six things as they go about creating maximum business value:

1. Make IT a profit center. The main role of IT is not to maintain the existing systems but to transform the organization. This can happen only if it becomes a profit center.

Every successful brand makes certain promises to its customers. The IT team must deliver on its promises every time. The IT service catalog, which is nothing but these promises documented, must be developed as a means to build brand equity. Moreover, the IT team must always work toward customer-specific goals. The IT team must also work fast, and project deadlines must be measured in days, not months.

2. Show the ROI. The benefits (and costs) of IT projects must be quantified, and a business case must be presented before getting the go-ahead for the investment. The indirect gains due to increases in employee productivity, customer satisfaction and collaboration must also be estimated while calculating the ROI.

No company can invest in every new technology. Calculating the ROI and comparing it to the required rate of return will enable IT leaders to make the right investment choices. This will also enable IT leaders to derive the best value out of their limited budgets.

3. Strategize with other executives. IT leaders must collaborate with top executives, analyze market data and trends, and strategize for the future. This will allow different organizational functions to work toward common business goals.

If IT leaders are part of the team that discusses the strategic course of a company, they will spend most of their time implementing technologies that will make the biggest difference.

4. Make IT a culture. The culture of IT must be ingrained into every employee of the company. A monthly newsletter that lets the entire organization know how IT is positively impacting business can do wonders. This will ensure that IT is rightly perceived as the heart of the company.

Over time, IT will be able to build stronger and mutually enriching relationships with other functions. In the process, the IT team will be motivated to work harder and to make technology work for the company.

5. Use SMAC. Close to 35 percent of Americans say that social media has in some way influenced their purchasing decisions. In developed markets such as the U.S., UK and Germany, bring your own device (BYOD) accounts for 21 percent of productivity gains. The right analytics tool can increase operating margin by as much as 60 percent. The cloud can enable a company to increase its gross profit by up to 2.5 times more than its competitors.

In the future, IT leaders must use these technologies not separately but as a single nexus of forces to gain competitive advantages.

6. Build a digital business roadmap. IT leaders must understand their company’s position on the digital business development path. It is only after this that they can identify the right technologies for revenue growth. Infrastructure planning must start well in advance for companies to build fully autonomous systems.

Fully autonomous systems will be commonplace by 2020, and IT leaders must be ready for both the technological and cultural change they will bring about.

Make IT Truly Work

In the coming years, it will be necessary for IT to stay ahead of business demands to win against competition. IT leaders will need to know the pulse of the customers at every point in time. In this way, business value can be maximized, and your company can achieve its true potential.

Ram Vaidyanathan is a marketing analyst at ManageEngine, the real-time IT management company. Ram closely follows emerging industry trends and is a frequent blogger on technology topics. His main interest is in the impact of the Internet of Things on IT management. He has an MBA from the Schulich School of Business. For more information on ManageEngine, a division of Zoho Corporation, please visit www.manageengine.com; follow the company blog at http://blogs.manageengine.com; on Facebook at http://www.facebook.com/ManageEngine and on Twitter at @ManageEngine.