Transforming IT Into a Profit Center

The days when IT simply focuses on servicing technology within an organization are fast fading. Over the last few years, there’s been a strong press for IT to play an active role in cost-cutting. As IT budgets faced cutting, the challenge became how can IT leverage resources to meet business needs under budget constraints.

In one sense, this pressure has been good thing, forcing discipline, better management, and better utilization of the both technologies and skills sets within IT. This shift prepares the way for a change from IT as service to IT as profit engine. Gartner analysts recently issued a press release, highlighting what they consider to be the four key principles of a new CIO manifesto*, including:

Principle No. 1: Information is just as important, if not more important than information technology.
Principle No. 2: By 2016 more than 50 percent of annual CIO project spending will be directed toward measurably improving the financial conditions of an enterprise.
Principle No. 3: By 2020 more than 50 percent of all enterprise information and IT spending will directly support revenue-generating rather than expense-related business processes.
Principle No. 4: The incentive portion of CIO compensation will be derived from the amount of money created by the efforts of CIOs and their staffs.

For the last several years, Gartner has been heralding a dramatic shift taking place in IT from maintaining systems to driving business goals. The long term impact of this shift means that IT will become a strategic part of revenue generation within organizations.

What will this shift look like? One way this shift is taking shape is in the move toward technology infrastructure that supports pattern-based business decisions. On one level, pattern-based processing is already at work in visualization and cloud computing and security systems as well as in network health assessments. This type of pattern-based processing will only grow in the coming years, and businesses must begin to consider how the systems within a business are and can be integrated for more effective pattern based processing and data mining.

Even as pattern-based processing is being used to anticipate system challenges and improve system responses, pattern-based strategic thinking will also play a role in business decisions. In our ever-increasing data rich and social integrated markets, businesses must mine their own proprietary customer data as well as market data to create pattern-based data landscapes that can help them increase agility and resiliency when responding to both opportunities and challenges in the market. IT is positioned to play a central role in this emerging landscape.

The current challenge for Enterprise as well as SMBs is to begin preparing infrastructure as well as businesses processes for the emerging pattern-based strategic culture that is emerging. Tomorrow we’ll consider the tools and disciplines involved in shifting toward pattern-based business processing.

* See Gartner Outlines Four Key Principles for a New CIO Manifesto

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