IT Value vs. IT Cost: Make it a Math Problem

Lorne Michaels, legendary creator of SNL, once said, “It’s just as hard to make a bad show as it is to make a good show.” IT projects are similar in that it can cost just as much money to do it wrong as it can cost to do it correctly.

Your IT projects, goals, and needs should align with overall business objectives to maximize your IT department value.

IT spending provides value when oriented towards business objective. In mathematical terms, how much of “x” dollars spent on IT contributes to “y” dollars of increased company revenue. The problem is most IT departments don’t have a budget or plan; without either, the value of IT is intangible.

With IT departments monitoring project costs and seeking purchase approval, IT departments can’t focus on innovating. Cost will always be part of the IT equation. Add strategic budgeting, communication with leadership, and project alignment for a better solution. Purchases with clear contributive objectives can provide favorable solutions to getting a project off the ground.

IT should not be focused on keeping the lights on.

Modern business success requires innovative technology and a team of professionals who can implement it. This allows IT departments to generate real and measurable business results. When IT leaders realize this, their departments will become a leading value-add department within your company.

IT leaders need to understand how to present their spending to executive leadership. Defined yearly business objectives and IT budgets that correlate back to them are essential. The IT leader needs to be the one that asks executive leadership what is the business trying to achieve? How much money does IT have in order to help achieve those goals?

IT needs full understanding of business objectives and funding in order to create strategic budgeting plans. If available funds are not sufficient for business objectives, the IT leader can inform executive leadership with context. With a finalized budget, then IT teams can put together detailed project lists. That will take away the need to “ask” for money on a project by project basis.

IT projects should be articulated by their value, not their cost.

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