Is your IT really the best it can be? How do you know? CIO.com Australia interviews Eugene Talasch, principal at ET Business Solutions, about measuring expense and finding the most value with IT.
Foster the Best
Talasch says businesses must implement internal IT metrics programs that capture and distill information, both of the contextual and standardized varieties, that can be used to improve IT delivery. The initial results of this program should become your baseline by which you benchmark with other businesses. To Talasch, benchmarking is the most useful tool in negotiating for lower costs, because it provides quantifiable evidence that opens up discussion. He goes on to talk about the usefulness of benchmarking clauses in IT service contracts:
A benchmarking clause is a tool that can be used by either client and/or vendor to measure the ‘performance’ of an outsourcing contract. A benchmarking clause allows the parties to re-visit the contract and provides an opportunity to re-state customer business outcomes (if outsourced) as they may have changed since the initial signing of the contract with the current state-of-play. It also allows the parties to identify what changes are required to the current state-of-play (if any) and close this gap, once again ensuring that vendor service delivery provides value to the customer.
There are three phases in a contract term in which benchmarking is especially useful. There is the aforementioned early baseline phase. Then there is the mid-contract point where benchmarking assures pricing is still aligned with the market. And finally, toward the end of a contract, benchmarking can be used to renegotiate for a new deal.
If costs are too high in IT, it could be the result of an organizational culture that does not fully understand what IT can do, or expect IT to operate as efficiently as it should. This makes smart measuring all the more important. You can read the full interview here: http://www.cio.com.au/article/565919/how-best-analyse-your-it/