Is it really possible to make ITSM profitable? 

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Young Boy Businessman Talks on the Telephone
© Andrew Rich / istockphoto.com

This is the first of two posts about how corporate IT departments can become value-producing profit centers.

It’s 10.30 on Monday morning at a mid-sized business consultancy. IT Service Manager Barbara Brown is already longing for the weekend. On Friday she learned that her budget was to be cut for the third year in a row. One of her best staff just resigned. Complaints about service levels, the lack of device and app choice are mounting. And it seams like the head of sales and marketing has been speaking to Salesforce – without involving her or her boss.

Standing still is not an option

This scenario is being played out in many corporate IT departments today. User needs and expectations, especially those of the ‘digital native’ generation, are outstripping IT’s ability to meet them. Service Managers like Barbara cannot provide business people with transparency over what IT services cost and the value they deliver. And increasingly, individual departments are bypassing the IT department altogether to get the tools they need to perform. The IT function needs to change, to avoid becoming a commoditized infrastructure management provider.

Dawn of a new ITSM order

Above all Barbara Brown needs to have a good answer to the question: “Why is our IT so expensive?”. To do this, she needs to be able to offer services proactively based on changing user needs. She also needs to make the associated costs transparent for all, and prove the value that those services deliver.

A holistic approach to IT service management can help achieve this by:

  • Integrating IT service processes with business processes
  • Making the steps involved, from service request to fulfillment and eventual retirement, easy to follow for everyone involved
  • Assigning a price to every service that generates a value higher than costs entailed in delivering it
  • Enabling continuous service and cost optimization

Once IT departments achieve this, they can take the next step towards becoming a full-blown profit center. This involves replicating this integrated service management environment and providing it as an outsourced service to other businesses. The result: new, profitable revenue streams for the organization.

The next post in this two-part series provides more detail on how to make this happen.

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