IT’s biggest contribution comes not through keeping technology running or cutting maintenance costs, but in having an impact on the company’s overall financial and performance objectives. In order to keep that at the forefront of the minds of every part of the business, we have incorporated into our IT strategy the concept of "operational contribution," a metric that is officially shared in Eaton’s post-project audit process. As part of the evaluation, my staff works with our functional and operational partners on the project to achieve an agreement on IT’s role in - or contribution to - the results, including working capital reduction, sales growth and the reduction of expenses outside of IT.
In a recent legal project, we thought that our contribution would be $750,000 in savings through expense management, but it turned out that we were able to quantify our contribution at more than $2 million per year through process improvements that we helped develop. At a higher level within the company are the portfolio management review meetings, where my executive peers and my IT leadership not only go over what is in the hopper for the coming year, but take a look back on recent major initiatives. As with every other communication of IT’s value, these review discussions are with the functional sponsors of the projects. No matter who we are speaking to, we truly have to demonstrate our value as a member of a partnership; saying that IT unilaterally did "X" will just cause friction, and no one will believe you, anyway.
Explaining IT’s impact on operations isn’t only the responsibility of the CIO. Everyone on your IT staff has to talk in terms that company leaders will understand and appreciate. To drill in that way of thinking, you have to make it part of the discussion at every level. This takes time; you can’t get discouraged if the message doesn’t get through to your staff immediately. I started by bringing in business-aligned managers to explain to my team exactly what the business lines do and how they do it-just as IT can be seen by other functions as a black box, often the business seems a lot more mysterious to IT staff than it really is, which prevents them from reaching out with questions or speaking up with ideas.
I also shifted the reports at our town hall meetings from technical project descriptions to outlining business-line operational impact. Reports from our IT managers are now focused on changes in business processes and applications and how IT helped make those changes happen. My direct reports who are responsible for the IT of an entire business line are now functioning as true partners who fully embrace investment and development by process, regardless of the applications involved. That keeps IT’s role in delivering value at the top of everyone’s minds.