Information Technology Reference
In-Depth Information
it infrAstructure LibrArY
If all the wheels (business functions) are
aligned, as a result of having a common direc-
tion (strategy), then all of them will roll towards
the same pathway (business goal). However, this
wheel synchrony is only possible because the
chair's column (IT department) supports the chair
(organization) by connecting all the wheels. This
simple analogy pictures the fact that organizations
are intrinsically dependent on IT.
In the past, this IT dependency meant a grow-
ing IT budget, despite the fact that there was no
evidence if IT investments would bring benefits to
the organization (Ross & Weill, 2002). However,
disproportionate budgets are no longer allowed
by the executive board, as Chief Information Of-
ficers (CIO) must justify their IT budget, and must
prove that IT projects are indeed necessary for
the organization to maintain its competitive level.
CIOs who have negotiation skills are able to un-
derstand the power division in the board, pinpoint
who has decision rights and who is accountable
in the decision-making process, and then success-
fully use relationships with key stakeholders to
influence their stance (Broadbent & Kitzis, 2004).
Another essential skill CIOs should have is
a broader understanding of the organizations'
structure. Organizations are gradually becoming
flat instead of having a vertical structure. This
transition leads to the establishment of horizontal
processes in detriment of vertical silos, which
made it possible to align IT and business. And,
CIOs should be able to effectively manage the
link between the two of them (O'Leary, 2002).
However, without a coherent framework to
manage business processes, organizations are not
well prepared to avoid or solve problems related to
this transition. Hence, organizations that manage
their IT correctly generate returns at least 40%
higher than their competitors and, for that reason,
it is very important that organizations adopt an IT
management framework (Ross & Weill, 2002).
In the present day, ITIL v3 consists of a set of
guidelines that specify what an IT organiza-
tion should do based on industry best practices.
These guidelines offer advice on the definition,
plan, implementation, execution, monitoring and
continual improvement of the IT service manage-
ment. Therefore, it is crucial not to regard ITIL
as a technological project but as organizational
change process (Silva & Martins, 2008).
To sum up, ITIL investment justification is
a non-trivial subject and only by analyzing the
investment are CIOs able to justify the value of
ITIL investments. In this way, the analysis of the
investment ends up being the main justification
support because it produces numbers that help
justifying the ITIL investment, by calculating the
benefits and costs. Thus, calculating the value of
the investment is part of the investment analysis,
and this analysis is absolutely necessary in order
to justify the investment.
implementing itiL
Nowadays there are multiple research case stud-
ies which support the statement that ITIL brings
value (Gartner, 2006). However, CIOs are going
through great difficulties so as to justify the value
of ITIL implementations to their peers, as there is
no pragmatic methodology in their grasp to prove
the business value of ITIL implementations.
In a recent survey, 50,5% of the executives
interviewed claimed that they did not approve ITIL
implementations for their organizations because
the business value of these implementations cannot
be proven as it is depicted in figure 1.
Indeed, estimating the value of ITIL imple-
mentations is not an easy task because many
variables have to be considered (Seddon, Graeser
& Willcocks, 2002). Maturity level, tangible and
intangible benefits and costs, organizational com-
plexity, and cultural context are just some of the
variables that can be considered. The time factor
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