Justifying the IT cost center

I’ve worked in the tech industry since the late ’90s, primarily working within a traditional IT department. Our main goal was to provide technical support to the users, ensure that back-end systems/services were available, and of course, secure the perimeters. It sounds rather straightforward, and it is, for the most part.

IT is just as important as Finance, HR, Facilities, Marketing, and general administration. These back-office departments make sure the company keeps running smoothly.

Many see these departments as an expensive overhead. At times, they are the first departments to get consolidated or even optimized – optimized, meaning fewer people doing the same or more work. Having a large internal service function can be costly, so it is important that these departments clearly show and share their leadership value.

I can only comment on the IT department and how we (IT) can show our value to the organization. While we often talk a different language and use weird tech jargon. We are not great at promoting our achievements and adding value.

People only see us as troubleshooters and “that IT guy fixed my Outlook and printer.” There’s more to IT than meets the keyboard!

Our (IT) responsibility is to work closely with the organization to help them realize reap the value of technologies. We need to help the organization optimize effectiveness, using the technology tools that the organization has invested in.

We (IT) too many times buy tools and technologies because we are asked or think they will benefit the organization. We spend money and time implementing these tools, assuming and expecting our user community to use them.

Traditional IT is applying the same approach as Field of Dreams “build it, and they will come!” – except we forget to educate users on using these new cool tools.

Creating Value

It can difficult for support functions to show value and justify their existence, especially in small and medium organizations where departments that are not generating income are seen more as a cost center. We are just spending hard-earned money.

IT is notorious for being a money spender. If you don’t manage IT, it can go overboard and buy plenty of tools and expensive equipment. Investments are made whether they are needed or not, or if they even support the business strategy.

As IT leaders, we must show value through what we accomplish. More importantly, we must be transparent with the IT strategy and budgets, clearly outlining what is being purchased and why.

We do that by working closely with department and teams, understanding their technical challenges, and find ways to use technologies to deliver efficiencies. This can only be achieved if you are listening to the business.

When the business sees that you enable technologies to resolve challenges or make processes more efficient, you are gradually gaining their trust. They will appreciate and support the money you spend.

Sharing the Plans

It is important that it is as transparent as possible and moves away from technical jargon. Break it down into digestible pieces, something that the business relates to, and work with the leadership on the plans.

I attempt to meet the senior leaders once a month, talking about IT challenges, road-maps, but more importantly, listen to their issues and plans. They appreciate the conversations and feel more involved in the IT processes. Together we define the plans for the coming financial year or resolve challenges they have.

I meet with the CEO and CFO weekly, share IT updates, and ensure full transparency on IT topics. These meetings last no more than 30-60 minutes and show how committed the C suite is once they understand and see the plans.

However, we need to follow through on our conversations and deliver on our promises. If we fail on that simple topic, our credibility will falter, leaving the business with a deflated experience.

Useful Communications Tools

To keep our stakeholders informed and up-to-date, you need to use various communications tools available within your organization. These are in addition to your face-to-face (and virtual) meetings with your stakeholders.

  • The trusted email platform
    • Email is a more personal notification from the IT leader to staff.
    • Used to provide regular updates to the organization, leadership, or individual stakeholders
    • I would recommend drafting the email and review it a few times before sending it.
    • Critically review the email to optimize the message and hopefully avoid lengthy messages.
  • Newsletters
    • A more generic communications tool, but yet a powerful message approach
    • Provide updates on more focused topics, and link to the knowledge base
    • We often use these for outages, tech tips, etc.
  • Intranet – if you have one.
    • Build a simple and informative IT intranet site
    • Provide access to the knowledge database
    • Share road-maps and technology updates
  • Leverage PowerPoint … my all-time favorite
    • Do not create lengthy PPT decks.
    • PPT is not a substitute for Word documents
    • Keep them high-level and provide graphs.
    • PPT is for presenting and used as a talking guide

Avoid death by PowerPoint. Many large organizations use PowerPoint as a substitute for Word and fill them with lengthy paragraphs and small fonts.

Overall, we (IT) need to involve our stakeholders a lot more in decisions, plans, and challenges, to better support the organization to gain efficiencies and grow.

I’m fully aware that many large organizations have very mature IT departments in place, and they really run well-oiled machines. These large companies can often fail in the basics, which is to communicate with stakeholders – and not just tell people, “here’s a new tool that you must use to get better revenue.”

I’m broadly basing my experiences in small and medium organizations. Many are doing great and can ignore these observations, but hopefully, some find it useful.

We need to run IT as a business. Closely monitor the CAPEX and OPEX very closely. Always look to optimize spending by consolidating technologies – spend wisely.

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