ERP for IT (ERP4IT) – An approach to creating greater shareholder value

Enterprise Resource Planning for Information Technology (ERP for It, ERP4IT) describes the automation of Information Technology. Wikipedia

The management of people, capital, relationships, assets, and information is one of the most critical functions of business AND information technology. However, the resource planning and management of IT across the enterprise is typically either an undisciplined practice or an underinvested operation.

The ramification of either of these approaches to ERP4IT results in misalignment with the business and does not maximize IT’s contribution to shareholder value. The inability to understand the linkages of business execution with IT, the demographics related to how IT assets and resources are leveraged, and the bottom line of contribution of IT – creates both an operational risk and competitive disadvantage for organizations.

The typical cause is a combination of a lack of design plan AND not correlating the business value impact. The latter point on correlating business value impact is usually due to fear of transparency. Case in point, if a global view to all things IT were to expose waste, productivity inefficiencies or ineffectiveness then the typical management response is to assign blame and remove said individual(s). The tools leveraged today to manage the IT lifecycle and operations are usually design and implemented to solve a point problem or need, without a federated view of all things IT considered.

To address this, organizations must directly attack the root cause of issues of design and transparency. IT executives who hold fiduciary responsibilities MUST create a collaborative and “no fault/no blame” approach to remove the barriers to transparency. This is easier said then done. Those that are able to pull this off, will expose hidden treasures of opportunity to drive very positive impact to the bottom line of the organization.

In terms of design, organizations must: define a federated taxonomy, afford legacy systems limits in terms of information access and format, build an integration and data federation platform and connect, capture and maintain an end to end view of all things IT (User Experience, Asset Inventory with dependencies, portfolio management, business service management, entitlement/identity/access management, architecture, content management, portfolio management, governance tracking, service management & delivery, etc….)

Both an operational model and CIO dashboard need to be created with standard analysis, benchmarks and associated planning activities. This playbook enables the CIO and IT teams to begin to drive top down optimization and operate IT more like a business.

Bottom line, IT organizations that learn and leverage from business models that they support and apply these lessons to the operation of IT, will drive sustaining value and importance of IT as part of the strategic plan of successful and admired organizations.