SmartAdvice: Match IT Spending To Growth Areas

Overall levels of spending on IT are usually 4% to 7% of revenue, with key focus areas varying by industry, <B>The Advisory Council</B> says. Also, watch VoIP and other emerging telecommunications technologies for the next wave of innovation to transform your business; and clearly understand your company's business needs before determining IT's role.

InformationWeek Staff, Contributor

May 11, 2004

3 Min Read

Question C: How should we assess our IT organizational structure and processes?

Our advice: Before you can begin to assess your organization, you must first have a clear understanding of the role your organization will be playing over the next two-to-three years. You need to create a tactical plan outlining overall business objectives, priorities, anticipated projects, and support processes.

Gaining a clear understanding of the business is critical to planning your organization. This is the step that most IT organizations skip. They think they know what the business needs, only to find out that they are wrong. You can't build a house without a blueprint. This is the area you need to spend the most time on. You need to understand the emerging culture: is the company in acquisition mode, does it have major expansion plans, what new products and services are on the horizon, and most important, what are the core competencies that differentiate you from the competition?

Organizational and process structures are defined by the company's point of evolution. New or fast-growing companies have different needs than established ones. The associated IT organizations also are completely different. When you're in new-development mode to support anticipated growth, you need good project managers as well as reliable outside partners. Technology understanding, planning, and selection also are critical in this phase. Established companies require more maintenance, and are good candidates for process outsourcing.

Once you have an understanding of the issues outlined above, building your organization and associated processes is easier. You know the point of evolution that you're in, the technologies and processes you need to support, and the skills that are required. Understanding the company's culture and critical competencies make it easier to decide which processes can be outsourced and which ones need to remain in-house.

-- Alan Guibord

Humayun Beg, TAC Thought Leader, has more than 18 years of experience in business IT management, technology deployment, and risk management. He has significant experience in all aspects of systems management, software development, and project management, and has held key positions in directing major IT initiatives and projects.

Beth Cohen, TAC Thought Leader, has more than 20 years of experience building strong IT delivery organizations from user and vendor perspectives. Having worked as a technologist for BBN, the company that literally invented the Internet, she not only knows where technology is today but where it's heading in the future.

Alan Guibord, TAC founder and chairman, has more than 25 years of experience leading IT organizations as CIO with both Fortune 100 companies and small to midsize businesses. Guibord has served as VP and CIO of Fort James Corp., VP of information technology at R.R. Donnelley & Sons, CIO of PictureTel, and VP of MIS and administrative services at Timeplex.

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