Structuring IT for Improvement

I met an interesting growth company last week. What made them most noteworthy was that IT was seen as essential to Naturalgasplant.PNGthe company’s growth. How many IT organizations, especially those in the energy sector, can claim this type of linkage between the business and IT? In my previous dealings with energy companies, IT was seen as a cost center and not treated as a strategic business partner essential to the company. 

 

To make IT more aligned and reachable, the CIO for this firm had organized IT into pillars called listen, plan, build, and operate. How interesting and innovative! This company’s thinking on listen, plan, and build falls in line with a recent study from MIT Sloan Management Institute that shows that properly done IT investments can pay off bigger than marketing investments!

 

In my meeting with the head of the planning group, he said that he believes in the notion of cascading scorecards to drive manager accountability to business goals. He then suggested something that I really liked. This was that proper planning requires that an organization be able to measure all pillars of IT and their processes—listen, plan, build, and run. More specifically, he said there need to be Key Performance Indicators (KPIs) that measure the quality of build phase and KPIs that measure the quality of their implemented services—the “operate” pillar to use his language. He believes these KPIs should measure and answer questions such as, “did we get the cost reduction we planned for in the plan pillar.” How innovative is that?

 

I’d like to hear from other IT leaders in the energy sector in particular.  What KPIs do you measure to show your value for your organization?  What best practices can you share?  What are you doing to move your IT from a cost center into the board room?

 

Related links:

 Feature:  Peak performance demands precision control

Solution page:  IT performance management

Twitter: @MylesSuer

Labels: IT strategy
Comments
Stuart Rance | ‎04-19-2012 01:04 AM

I love the fact that they called the relationship management team "Listen", that shows a very high level of maturity.

 

Please have a look at my recent blog 3 Steps an IT manager Should Take to Earn Their Seat on the Board, which looks at a number of related issues.

Ricardo Gusmão | ‎05-18-2012 05:28 AM

I know that's a very late comment to this post, but I had this thought today morning. Our company has small power plants over the country (Brazil). We don't sell energy direct to the final consumer, so I guess that my idea won't be accepted by the company directors, but resuming is that:
I would suggest selling the KPI's as a service to the final consumer, I mean, industries, other companies or even the population itself. For a little fee the consumer would have access at the site of the energy corporation to an area where he could see some BI panels as his energy consume through the month, and even details of the variation of energy consume through the day.
Anyway, I'll still try to sell this idea here.
Regards!

MylesS | ‎05-18-2012 04:28 PM

I think that your customers are your customers. Managing IT is about how well you serve them. What are their strategies and how well do you delivery against them. This is where I would focus regardless of the nature of the business.

 

Myles

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About the Author
Mr. Suer is a senior manager for IT Performance Management. Prior to this role, Mr. Suer headed IT Performance Management Analytics Product ...
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