You Can Take Financial Transparency Further: Getting the Business Perspective on IT Spending

Providing business users with financial transparency about your company’s IT services doesn’t just promote business unit (BU) participation in their own IT consumption choices; it can also be a great tool to make sure enterprise-wide IT initiatives are on track in meeting business and corporate objectives.

After launching financial transparency last year as part of our IT-as-a-Service (ITaaS) model, EMC IT invited business unit leaders to meet with IT executives to share details and opinions about our enterprise IT spending. They got to discuss their views with each other on a list of teed up enterprise IT initiatives— those projects that have cross-business benefits as opposed to serving a single business unit. In fact, we asked them to vote on the enterprise initiatives to help us rank their importance.

We used business leaders’ feedback to turn what was previously a less than precise approach to setting our enterprise IT spending priorities into a much more refined list of which initiatives we should spend money on and which should wait.  In addition, we’ve maintained the goal of continuing to shift our overall EMC IT budget to enterprise initiatives.

Beyond the enterprise IT budgeting process, we are continuing our collaboration with these business leaders by providing them with ongoing information about our enterprise efforts, as well as their respective BU efforts, giving them timely check points about project progress and seeking feedback on any adjustments. The group also meets once a quarter to share insights, with added virtual updates as needed.

This new level of collaboration between IT and BU leaders is an extension of financial transparency that we didn’t anticipate. At first, sharing details of enterprise proposals and having BU leaders vote on them seemed strange. But as we go back in time and look at our enterprise priorities, we sometimes see things that got funded that maybe shouldn’t have while other vital projects waited. This new process lessens the chance of that happening. We aren’t just basing our investments on IT’s view of what’s important.

As a result of sharing transparency on enterprise goals, we’re doing a much better job of prioritizing our enterprise spending with educated consensus.  It’s not that reaching such a consensus is easy. It isn’t. We have a roomful of business leaders and IT executives who may disagree on priorities. It requires behind the scenes work as BU leaders and their business-facing IT counterparts go back to their groups to get feedback.  But our IT executives were committed to getting this done.

We did face some challenges regarding enterprise IT funding with the initial launch of financial transparency, in which enterprise money was allocated to each group as part of their respective IT service budget. We found that whenever there was any funding left over from enterprise initiatives, individual BU’s wanted to spend it on group-specific projects rather than further enterprise investments. This contradicted our goal of moving the IT spending needle away from narrow, single-focus projects to more enterprise-wide initiatives.

To remedy that, starting in 2013, we created a pooled enterprise fund from which we apportion individual BU contributions based on the level of benefit that each group receives from each enterprise project. When any added funding becomes available in the pool, it is used for the next enterprise project on the priority list established with BU leadership input.  Business leaders know what’s next on the list because they have reviewed and voted on it.

It’s a very methodical engagement process but, at the same time, it is simple and not overbearing. We don’t require BU leaders to meet weekly or even monthly. We ask them to rank projects of high, medium or low importance. We send them objective graphics showing results and short updates, rather than inundating them with cumbersome spreadsheets.

Thus far, we have sought BU leadership feedback on enterprise business application services.  We continue to deliver business application services with a relatively flat capital expenditure budget while the company continues to grow. We are still debating whether to extend that collaboration to core infrastructure and security spending priorities.

Exploring such new approaches as we evolve to ITaaS takes some adjustment both culturally and procedurally. We are doing things differently. And sometimes that brings pushback from the business and IT. (Read Pushback Happens, And So Does Reason) The easy way out would be to just not do it.

But if we want to stay relevant in today’s IT environment and to truly serve the needs of business users and the company, we need to persevere. Don’t be afraid to take chances and leverage executive support to create a new dialogue with the business you serve.

There are benefits at the end of all this. For me, it feels good to know that the money we’re spending on enterprise IT is going to the right places—not just financially speaking but from a business perspective.

Read our white paper IT-as-a-Service: Guiding Principles for Achieving Financial Transparency.

About the Author: Dell Technologies