CIOIT-Business Alignment

From Cost Center to Profit Center: The New IT

How can you illustrate to the blind organization the true value IT brings? In an interview for CIO Insight, Peter High talks with Don Lewis, the CTO at Group Health, and uncovers his secrets to ensuring that technology is efficient and maintaining value for the customers.

Revenue Alignment

The key to moving from cost center to profit center is to remember that IT serves as the caretaker for other IT systems. There is no revenue aspect in IT, which makes it difficult to fiscally measure the value it brings to an organization. Group Health approaches this with a novel idea to align IT with business departments that accrue revenue, and look at the money brought in as a value for the entire organization.

You know how important it is to align IT strategy with the business strategy. In the case of Group Health, they implemented a service management platform company-wide by utilizing ServiceNow. It has become a role for IT to actively collaborate with business partners in order to implement technology to improve business processes. They have taken a direct approach and have their IT team sit in on meetings; this allows for them to become very familiar with the problems that are most relevant within the company.

Prioritizing Capabilities

Within the strategic plan, Group Health has implemented new ideas to help them prioritize IT capabilities. The main change was to collect and analyze data across the entire IT infrastructure, something that had previously not been an option. This created visibility for all processes and has created a simpler, more consolidated manner by which IT can achieve its own goals. Along the way, they found that educating everyone in the beginning stages was essential in making quick decisions.

In order to monitor how they are doing, they divide their key performance indicators into three groups: internal, IT tied to specific business plans, and the quality of the outcome. This division allows analysis of how well they are performing in the eye of the customer and how they compare within the industry.

When Lewis personally began his career in IT, it was a department strictly devoted to data processing. Since then, it has evolved to encompass a plethora of activities that stem from the necessity of good technology. They communicate much more frequently and hopefully more efficiently with other departments, making their efforts collaborative. In the future, Lewis is looking forward to a move towards software as a service or platform. They are good at implementing new programs, but not great at maintaining them.

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