Leading Technology Business Management Provider Identifies Five Key Trends That Are Reshaping the Role of the CIO in 2011 and Beyond
Seattle, Wash. – December 1, 2010 – Apptio, the leading provider of on-demand Technology Business Management (TBM) solutions, today announced its 2011 predictions for trends that will shape the role of the CIO. Based on insights gleaned from customers, analysts and partners, Apptio believes that 2011 will inaugurate a decade of significant transformation for the CIO and IT. This will be driven in part by the ongoing adoption of private and hybrid cloud computing and the pressure to make IT services portfolios more transparent, accountable and aligned to the business.
Apptio’s top five predictions for the CIO in 2011 include:
1. CIOs Will Run IT Like a Supply Chain Strategist to Meet Business Demands
The next decade will be one marked by transformation for IT leaders. This is especially true for the CIO as the role expands to one of business enablement. With this new charter, CIOs will be pressured to become better stewards of the business of IT, with greater focus on financial transparency and the ability to communicate the true costs of the IT services they deliver.
In this respect, the CIO will be required to think about delivering IT services in the framework of a supply chain. Similar to the transformation that took root in the manufacturing industry with holistic supply chain initiatives like Lean Manufacturing and Six Sigma, the CIO will need to accurately calculate the cost of IT components to, in turn, determine what it costs to produce, operate and deliver their portfolio of services. In doing so, CIOs and business leaders will be better positioned to manage and meet the demand for IT.
2. The Cloud Will Force CIOs to Deliver Services at Market Rates
In addition to the scale and agility that public and hybrid clouds bring to the enterprise, they are introducing third-party competition for internal IT services. This competition provides a valuable benchmark by which to compare service delivery costs, and places pressure on CIOs to deliver IT services that match the quality, cost and value of those offered by the market.
As such, CIOs will be tasked with helping their businesses make more educated decisions about which services should be transitioned to the cloud. Contrary to popular belief, the cloud does not always represent the most cost-effective choice. In the coming year, CIOs will need to demonstrate which IT services would be best served by a shift to the cloud and which should be delivered through traditional IT resources – all while ensuring they maintain the quality of their services.
3. CIOs Will Demand a Full Spectrum of New Metrics to Drive the Accountability of IT
As the financial acumen of IT leaders becomes a greater priority, CIOs will be required to combine financial and operational data across disparate systems in order to be fully aligned with the business units they support. Transforming IT in this manner will require a new set of financial metrics that will help CIOs plan over both the long and short-term. These metrics will include operating profit and margin, net present value (NPV) of the IT portfolio, return on IT assets, IT spend ratio, unit cost by service category, total cost of ownership by business application, fixed-to-variable cost ratios, CAPEX ratios, and budget versus forecast.
By marrying data across general ledger, asset management, service desk, monitoring systems, project and portfolio management tools, and spreadsheets into a unified system of record, CIOs can move beyond pure performance metrics to understand the true cost, quality and value of IT services. With this change, a new breed of CIO will emerge: one that unifies deep business skills with IT savvy.
4. CIOs Will Reject Assumptive Data in Favor of Actionable Data to Make Real-Time, Fact-Based Decisions
The CFO of a large enterprise organization would hardly rely only on assumptive data to manage the corporate balance sheet. Instead, CFOs require a blend of historical and actual data to define annual budgets and build forecasts that map to the business. The CIO has not been afforded this luxury. Determining the total cost of ownership of their IT services has been too complex and time-consuming.
Delivering IT cost transparency has long been a major initiative for forward-thinking CIOs, but they lacked the right tools for the job. However, new solutions like Technology Business Management are arming CIOs with data that’s grounded in reality, not assumptions. Starting in 2011, the CIO will identify and adopt sophisticated data collection and analysis technologies that will empower them to drive budgeting and forecasting processes in a more proactive and granular manner.
5. CIOs Will Leverage New Technologies to Better Collaborate with Business Partners
Cost-transparency and real-time metrics alone are not enough for tomorrow’s CIO to transform IT in a meaningful way. While they provide a mechanism by which to identify and evaluate cost drivers, they only represent one half of the Technology Business Management coin. For real transformation to happen, CIOs will need to forge a true partnership with the business. This collaboration between the CIO and the business will be fostered by a mix of new enablement technologies including purpose built process automation, master data management, on-demand benchmarking, next-gen business intelligence and enterprise collaboration.
“2011 will kick off a decade of transformation for the CIO and the IT organization as a whole,” said Sunny Gupta, co-founder, president and CEO of Apptio. “For the first time, CIOs will be evaluated by their ability to clearly demonstrate the cost, quality and value of IT and deliver measurable value to the business. Technology Business Management represents a change agent for IT and a conduit for organizations to become more fiscally accountable. We have seen first hand the positive impact Apptio can make in Fortune 500 organizations, and believe Technology Business Management will be the wave of the future much like financial management tools were for CFOs decades ago.”
Apptio is the leading independent provider of on-demand Technology Business Management (TBM) solutions for managing the business of IT. Apptio enables IT leaders to manage the cost, quality and value of IT Services by providing deep visibility into the total cost of IT services, communicating the value of IT to the business through an interactive Bill of IT™, and strategically aligning the planning, budgeting and forecasting processes. Apptio’s TBM solutions play a critical role in helping companies understand and drive chargeback, virtualization, cloud and other key technology initiatives. Global enterprise customers such as Bank of America, Boeing, JPMorgan Chase, Microsoft, St. Luke’s Health System, and Swiss Re rely on Apptio® products and services to reduce costs and align IT with business priorities. For more information, visit the Apptio website or the Apptio blog.
Barokas PR for Apptio