How much control does IT really have over its offerings and services? For most enterprises, the desired answer is ‘total.’ But in an age when business users ranging from staff members to C-suite are much more than bystanders and have well-developed opinions about the technology they use, IT is forced to become more nimble and responsive to the demands of the people they serve.

Traditional IT control relies on a locked-down environment in which IT calls the shots and dictates services, systems, features, and costs. But there may be a better way to deliver IT services, one that keeps up with the needs of users while maintaining better and more flexible control over spend, and results in a closer partnership between IT and business units overall. 

Consumption-based IT flips the perspective away from traditional control-based models by bringing business units into the decision-making process, using transparency to demonstrate the costs of services.  The change to a more open collaboration between IT and business units may mean loosening up on the reins but the end result is better user satisfaction, more productivity, and better control of ongoing expenses.

»Related content: Bill of IT changes the way your business partners consume IT

Budgetary allocations

IT budgets have flattened out in recent years but demand for new services and ever-expanding features puts pressure on IT to innovate. Progressive CIOs are working with line-of-business (LOB) units to deploy or expand the use of SaaS-based services that can deliver functionality without the time and expense internal development efforts require.

As CIOs manage budgets to keep legacy systems in place, new demands for features force decisions about where those budget dollars are allocated. In some cases, new functions are rolled into existing systems as development efforts are refocused. The increased functionality becomes an invisible expense as it disappears into the existing maintenance overhead.  

IT can gain control over expenses and credibility for service costs by providing transparency into what resources are being provided and how they are being consumed by business units. Converting from a control-based operational mode to one based on how assets are consumed allows IT to better manage costs and attain a better understanding of how resources are allocated, giving business units both a voice and accountability for their IT needs.

Bringing shadow IT into the light

Business units have been implementing solutions to their own perceived business problems since cloud-based systems began offering quick and inexpensive application trials. Some percentage of those trials eventually work out and become business critical systems that serve initiatives well. Often, they become part of the business unit’s budget, but those expenses are not part of or even known by IT. This shadow IT has been shunned by traditional IT for several reasons, not the least of which is the lack of oversight it presents. But if the external resource is serving the business function well, IT is unlikely to be able to, or even want to, disrupt current operations by replacing a working system.

IT has an opportunity to embrace bill of IT solutions that provide visibility regarding usage patterns. Accountability is typically built into these applications as part of their billing process, letting business units monitor their own consumption and related costs. Understanding what apps are being used for what purposes and by which business segments can help IT become proactive in managing and delivering deeper insights into the effectiveness of each app. The business is less likely to engage in shadow IT because IT is able to give better advice and support, and shadow IT is less feared by IT because they have a better understanding of how and why it exists.

More informed decision-making

In the traditional control-based operation, business units have little control over the costs of their IT services because IT spreads the costs in undisclosed ways. In the consumption model, IT is better able to understand and share resource usage data at a granular level, letting the business evaluate the value of the resources they consume. IT serves in an advisory role by helping business executives make more informed decisions about expenses and the ROI being derived to evaluate options with better visibility.

While much of the change toward using external resources may be initiated by line of business execs and their staff, it’s the CIO’s responsibility to incorporate these services into the IT portfolio. The move requires a persistent focus on IT’s customers and how they are using computing services. While it may be possible to retrofit some tracking into legacy systems, the effort to do so is likely to eclipse their benefit, particularly when consumable services offer built-in usage tracking and accountability.

Shifting from a control-based IT structure to one that is more transparent about what resources are consumed by business units and how that consumption affects budgets across the enterprise can give IT better control over its spend and deliver enhanced services across its domain.

»Read next: For IT cost recovery, when is good better than perfect?

 

Scott Koegler has more than 20 years experience as a technology journalist and has written for publications including Network Computing, Forbes, Internet Evolution, and many others. He also practiced IT as a CIO for 15 years.