Transforming IT for a new era: Running IT like a business

A core element of IT’s mission is to constantly seek out new and better ways to support the business. Last year, a prime focus for this culture of innovation was improving efficiency and reducing costs to help organizations weather the economic downturn. Now that the economy is improving, IT will play a vital role in improving productivity and enabling new strategies for growth throughout the organization.

In this series of articles, Citrix explores new thinking for a new era of business. The strategies explored below offer significant improvements for both business and IT, and set the stage for a revolution in computing models and work practices.

Part three: Running IT like a business
The goal of IT transformation isn’t just to spend as little as possible. Other goals include efficient allocation of resources to support business priorities such as improving bottom-line profits; enabling new products, services, and market strategies; and driving top-line growth. A better understanding of the correlation of technologies to business processes—as well as a more businesslike approach to IT itself—can help IT fulfill this mission more effectively. Decisions about IT strategies and investments should be made with a clear understanding of their financial impact on the business, not just the IT budget. IT management should be organized around discrete services designed to address specific business needs rather than technology silos or infrastructural elements. IT personnel should have a similarly broad perspective, with skill sets that extend beyond individual silos to enable a more holistic approach to addressing business requirements. By operating as if it were an independent solution provider—not just a cost center—IT can improve its own performance as well as the performance of the enterprise it supports.

Become a service provider
In recent years, many companies have embraced a new strategy for making IT more responsive to business needs: Business Service Management (BSM). BSM monitors and measures IT systems according to their role in the business, rather than according to their technology. Applications are organized as a catalog of business services, each with a manager accountable for its performance and an advocate for its users. By identifying the connections between IT  elements and the business services they support, IT can manage, monitor, and support infrastructure and applications in closer alignment with business priorities.

While not every organization will decide to invest the time and resources required for full-fledged BSM, its core concepts can be useful for any IT department. If a business service fails, BSM can pinpoint the exact component that caused the failure; if a component fails, BSM makes its business implications clear. For example, the web storefront for an e-commerce retailer is typically powered by a complex back-end of servers, storage, databases, firewalls, routers and other network devices. A failure in one of these elements will have a far greater, more immediate impact on revenue than a failure in an element which supports Human Resources or Facilities Management. BSM will proactively raise an alert if there is a potential failure coming up in any of the components supporting a service, and allow IT to prioritize its operations according to business impact. Does this server play a direct role in revenue generation? If so, fix it first. Does this aging router support only back-end administrative processes? If so, it can be a lower priority for upgrade than a router which supports more business-critical functions.

Improve cost transparency
A more business-centric view of infrastructure and applications can enable a truly transformative capability for IT: transparency into the true cost of usage of IT services. IT can calculate the total cost for running each service, then charge variable costs back to the business based on actual usage. Unacceptably high charge-backs indicate that the service is underutilized and raise the question of whether these resources would be better redirected to a service with higher demand and business value. Associating real costs to usage gives business units the visibility and analytics they need to make more careful decisions and set priorities about the services they consume, trims waste and optimizes budgets. For IT, knowing the true cost of and demand for services provides benchmarks for continual cost reduction and helps set priorities for new investments.

Even without implementing a charge-back structure increased transparency can help both business and IT understand the true costs of their decisions.

Think critically about IT strategies and computing models
New computing models from software-as-a-service to cloud computing and virtualization can yield vast improvements in agility and cost efficiency because they change the way companies apply IT resources to business requirements. However, the enthusiasm about such innovations can easily blur into groupthink, obscuring the reality that not every company will arrive at such benefits by the same path, if at all. In some cases, the question is simply how to apply the new model to a specific enterprise. For example, desktop virtualization, often discussed as if it were a single, monolithic technology, actually encompasses several distinct architectures, each suitable for different use cases.

The rapid pace of technological evolution makes it essential to continually reevaluate assumptions. Hosted infrastructure, cloud computing and software-as-a-service may have been more efficient than the legacy systems they replaced, but the latest virtualization strategies and technologies have changed the math, requiring a new round of financial analysis. For some companies, backsourcing or inshoring—bringing formerly outsourced functions back in-house—is now more cost-effective; for others, the selective leverage of cloud providers continues to make the most sense; for still others, an internal cloud is the ideal solution. The lesson for IT leaders: even the most promising trends and innovations must be examined in light of the organization’s unique requirements and priorities, from performance, flexibility and security to sustainability and regulatory compliance. The broader financial impact of each investment must also be considered, as different options have different implications for the business processes they enable. A critical attitude, backed by rigorous due diligence, will separate hype from reality and make the best decisions for the business.

In our next issue, we’ll continue our series on “Transforming IT for a new era of business” with an exploration of strategies for investing in innovation. In the meantime, you can find additional information on the strategies and technologies discussed above on the Citrix web site, including:

Citrix Delivery Center virtualization technologies
Citrix Cloud Center delivery infrastructure products
Citrix XenDesktop desktop virtualization and VDI solution
Citrix FlexCast virtual desktop delivery technology