As though running an IT department wasn’t enough, now CIOs are being asked to become more valuable to the business – to start thinking about the company’s bottom line. What part of running a company’s cost center are they missing? It sure seems as though the pressure on CIOs to deliver more business value isn’t going to go away anytime soon. If only there was some methodology that we could use to unlock all of that business value that we know is within the IT department. Oh wait, there is: it’s called the IT-CMF.
What Is The IT-CMF?
A consortium of industry and academic players have gotten together and created what they are calling the IT Capability Maturity Framework (IT-CMF). The thinking behind this new model for operating the different parts of an IT department is that CIOs need an end-to-end integrated framework to help them boost their department’s IT capabilities while at the same time providing them with a way to show the rest of the company that IT can deliver bottom line value.
IT Investment: Not A Pretty Story
It turns out that most companies end up spending roughly 1% to 5% of their annual revenue (note that that’s revenue [a big number], not profit [a smaller number]) on their IT activities. However, there’s never really been a way for firms to do a good job of either measuring or maximizing the return that they’ve been getting on this investment.
You might think that IT departments would like this state of affairs: no measurement means no oversight. However, that’s not the case. Despite having become more strategically important to a company’s success, IT departments have been stuck as a cost center. What’s been missing has been some way to align what CIOs do with the business results that they produce.
How Does It All Work?
Clearly, trying to operate any part of an IT department can be a big challenge. The IT-CMF framework tries to simplify this by breaking a big problem up into several smaller pieces.
At a high level, The IT-CMF breaks an IT department down into four main macroprocesses:
- Managing IT like a business: this requires an IT Leader to shift their focus from the technology of IT over to both customers and services.
- Managing the IT budget: keeping track of where the money goes in order to make sure that the company gets the best performance and value for their investment.
- Managing the IT capability: this consists of making sure that you have the IT assets where you need them as well as ensuring that you are developing the competencies that the company will need in order to succeed.
- Managing IT for business value: clearly showing how investments in the IT department tie back to clear benefits for the business.
How To Use The IT-CMF
Each of the four major areas of IT operations is then further broken down in the IT-CMF model. It identifies a total of 36 different categories that are then distributed among the four major macroprocesses. This is where the IT-CMF can show an IT Leader where their team fits into the overall IT department.
The IT-CMF classifies everything that an IT department does up into five different stages of maturity. We all do the things that are needed, we just don’t always do them as well as we should be doing them.
Once you’ve taken the time to classify your IT operations using the IT-CMF model, you can then benchmark your team against other companies in order to find any process maturity gaps.
What All Of This Means For You
It’s never been easy to be a CIO and the current global economic troubles certainly haven’t made it any easier. More and more CIOs are being asked to focus on how the actions of IT can leveraged to boost the company’s bottom line.
In order to justify the company’s ongoing investment in the IT department CIOs need a framework that will allow them to demonstrate the value of IT. The IT Capability Maturity Framework (IT-CMF) provides the framework that CIOs can use to identify IT process maturity gaps.
Moving what your IT department does from being a cost center to becoming a value center has always been the goal of CIOs. The IT-CMF now provides CIOs with the tools that they need to accomplish this. Now is the time for CIOs to use these tools to show the rest of the company the value of the IT department.
Question For You: Who in a company outside of the IT department do you think would have to champion the use of the IT-CMF in order for it to be successful?
What We’ll Be Talking About Next Time
When you become a CIO, you will have the chance to be leading the IT department when the next global recession hits. I don’t care if you’ve got a list of Cisco technical certifications as long as your arm after your title and the fanciest MBA degree available, there’s no training for how to deal with this. Good news: the folks over at Cisco are in the process of blazing a trail that will show CIOs how to deal with this type of situation.