Organizations are again beginning to increase their investments in information technology. However, CIOs of Fortune 1000 companies are challenged more than ever before to maximize value creation from their technology investments, reduce security and execution risk to their operations from IT, and optimize their overall technology spend. In this research note, Ventana Research introduces a new concept, "IT performance management" a combination of analytic systems and processes that enable CIOs to rapidly achieve these objectives. It enables CIOs to spend smarter and implement good processes for IT and business governance.
Ventana Research has created a framework to identify various processes and technologies within the IT Performance Management umbrella and explain how they relate to each other. In our framework, IT Performance Management solutions can be broken down into three unique areas.
1. Aligning IT and Business Objectives contains solutions that enable IT executives to achieve alignment between IT investments and overall business objectives. IT organizations have been using operational systems such as project management and resource management to streamline their overall process and "do things right." However, they might still be working on a wrong set of priorities.
Alignment between business and technology enables them to prioritize IT investments and work on "the right things." IT project portfolio management and IT asset portfolio management are some of the common approaches to achieving alignment. The project portfolio management segment has attracted a number of vendors both pure-plays and large enterprise software companies.
2. Asset Rationalization contains solutions that enable IT executives to plan asset rationalization initiatives and reduce their overall IT expenditure on infrastructure assets. Rationalization projects require IT organizations to identify the right opportunities for data center/server consolidation, vendor rationalization, infrastructure re-deployment and contract renegotiation, and then create optimal plans.
With over 50% of the IT spend going towards infrastructure assets within most companies, smart rationalization enables IT executives to find the money to fund other strategic initiatives. Rationalization is an emerging area in IT Performance Management, but one with a lot of promise.
3. Risk Reduction contains solutions that enable information technology executives to reduce risk to their business operations from internal and external IT factors. The risk from internal factors is primarily attributed to poor planning and execution of projects and initiatives. By using proven techniques such as program performance management, companies can reduce their internal risk by improving their overall execution of projects and delivering them within budget and on time. New solutions are emerging that leverage analytics to identify security risks and then track remediation progress.
These three IT performance management solution categories enable IT executives to make data-driven decisions and build plans that maximize the value created from IT investments. These solutions enable IT executives to address issues such as:
- Where can I squeeze more out of our asset infrastructure spend?
- What processes and systems can I use to align my key IT initiatives with my organization's strategic imperatives?
- How do I reduce the complexity of my organization's IT architecture and make it more agile?
Together, they help improve alignment, reduce costs, and lower execution risk and are fast becoming a "must-have" set of solutions for the CIO. Ventana Research recommends that CIOs and IT management implement IT performance management as a process that can validate and improve alignment between business and IT.