Service-oriented IT needs more than just a general ledger
“Dad, what’s for dinner?”
“Here’s the grocery receipt. You tell me.”
(Sigh) “Are we having a ‘teachable moment’ again?”
When it comes to grocery shopping, I’m a creature of a habit. Same store, same time, and the same route through the aisles striking a balance between the healthy diet in my head and the junk my kids actually want. When I get to the check-out, there is also the same habitual panic—how many actual meals do I have?
Don’t misunderstand me. I know why things get added to my cart. But the items on the conveyor belt may not look—to your eye—as promising ingredients for a good meal. Or you see the ingredients and make assumptions about what I’m going to make—leading to disappointment when you are served up something else. The cook and shopper are one and the same in my household, but when they are out of sync, we end up with a menu of compromised meals (“Anyone for Poptarts?”) and domestic disharmony (“Dad, you know kale and cilantro aren’t the same things, right?”).
The same rings true for IT spend. IT finance purchases, infrastructure and operations (I&O) provisions and the business consumes but the value of spend isn’t captured by line-item detail in a general ledger or in IT towers or products (e.g., compute and storage).
Service-oriented IT takes the financial and operational view of IT and presents it to the business in a context they understand—the applications and services they consume. GL entries (ingredients), align to business services (meals), and are allocated to business units (my kids). A service library with defensible unit rates ($/TB for storage, $/user for email) enables business stakeholders to define value without getting bogged down in technical or financial minutiae.
However, this is hard to do. First, GL entries rarely map 1:1 to a service. GL account numbers show total spend, but they do not snap to the fully-burdened cost of each service (e.g., a systems admin supports servers that host multiple applications and services). Secondly, the cost model must be flexible. I&O makes daily decisions to optimize the infrastructure footprint; the business makes consumption choices that alter the total cost of that service. To be credible, a cost model must be able to react to changes and recalculate service TCO.
Service-oriented IT pivots away from a technical view of IT and towards the capabilities it delivers. The business doesn’t want to concern itself with the technical whys and logistical hows of IT—they just want to be accountable for their consumption of business capabilities and to have choices in controlling their costs.
Or, to put it another way: service-oriented IT ignores the contents of the shopping cart and makes a value judgment of what’s being served at the dinner table.
Service-oriented IT takes IT spend off of its technical pedestal and presents it as a deliverer of business capabilities. A service library is a living asset (e.g., new services are added, obsolete and underused ones are removed) that matures over time: fully defensible and expansive service-oriented IT doesn’t appear all at once. The maturity curve reflects an organizations progress toward the goal of narrowing the gap between IT spend and capabilities.
Now, if you’ll excuse me, I have to go home and make dinner for my two business units, er, kids.
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