Ashley Pettit, SVP for Enterprise Technology, is what insiders call a State Farm-lifer, having joined the insurance company after completing her degree in finance and computer information systems. Today she has oversight for all enterprise technology infrastructure, IT operations, enterprise architecture, and software engineering practices.
How can we improve the way business and IT work together?
I bet I speak for other leaders like myself when I say that, at our respective companies, IT isn’t usually in the running for a popularity award.
The business areas we serve are often dissatisfied. They feel like they’re on the outside looking in. They don’t understand our technical jargon, and they wonder why IT projects take so long and cost so much.
A couple of years ago, the IT shop I co-lead decided to try something different. We began applying Technology Business Management (TBM) and moving to an agile operating model. The shift took time, but we’re now far enough along that we can evaluate our decision. And the results we’re seeing so far are very encouraging.
So, what changed? Simply put, our IT shop is showing up differently. Instead of forcing tough conversations, we’re shining a light on things that were hard to see in the past. We’re giving business partners a different view, and that’s changing the way we work together.
We’re also building trust. In the past, projects were often thrown over the wall to IT with a hope and prayer that we’d pull it off in time. Now, we’re getting more invitations to the table early on. Our business partners want us to help shape a project as it develops.
As a result, we’re starting to hear new feedback. “We always thought IT was the obstacle, but…” and “We’re starting to see the value…” and “We didn’t know you were bringing all this to the table…”
The critical first step: A more sophisticated bill of IT
To implement TBM at State Farm, our IT team knew we had to build champions in the larger organization. Here’s how we used a more sophisticated bill of IT and showback to do it.
First, IT began building accountability and measures around our costs internally. We loaded data into an industry-leading software tool to educate ourselves and better understand our IT cost structure. We had some archaic, disconnected ways of doing costing and budgeting in the past, and we knew we needed to get to a better place before we went to any kind of showback with a business partner.
We picked a single area to be our early adopter. After securing buy-in from senior executives, we rolled out a new bill of IT in that space. We wanted to see how the conversation between business and IT could be different—from strategy and planning, to investment decisions, to the ultimate cost.
For us, success came from a partnership between the business area, our finance team, and IT. Finance facilitated the conversation by explaining that we’re changing the way we share the details of our IT expenses. Instead of using a crazy formula that few understood, finance worked with the business area and IT to create a view of the costs that was more easily understood. It was a critical move because IT was able to fully and equally participate in the conversation with the business.
We’ve piloted this program for two quarters, sharing monthly IT bills supplemented by strategic insights. Things like: “Here’s something we noticed: you have two applications that do the same thing.” Or, “You have two applications, but this one has a really low adoption and user utilization rate. Should we consider migrating?” Or, “Is there something else you’d rather do with that money?”
Our business partners in this pilot are excited. They’re talking with peers on the business side about how different the conversation with IT is today. They’re sharing things they’ve learned about their operation that have influenced how they make business and investment decisions. They see a new joint accountability between business and IT to hit certain critical outcomes.
We plan to bring this to more business areas, and we’ll begin with showback. We believe seeing the actual costs is key to success.
Our showback goal
Our goal with showback is transparency and visibility. Today, we’re at risk of having circular conversations based on perceptions, not data. The business thinks IT costs too much. IT thinks the business should make different decisions. The bill of IT is objective: it is what it is. This is what we’re spending, and this is the utilization. Good, bad, or otherwise.
With the bill of IT in place, we can have a different conversation. “Is that the right split between run cost and investments in the future or do we want to try to shift that mix? And if we shift, will it work?” We can look at the things IT can do. We can look at contract negotiations with vendors and providers. We can adjust service levels. You can adjust your utilization. We can sunset old applications (which we had been dying to do).
TBM helps us be action- and solution-oriented. We can work towards a common outcome. We can see the available levers to pull in order to get there.
And, as conversations between business and IT change, we hear business leaders asking questions about how to best partner with us by applying some of these concepts (such as agile) to their own operations.
To sum it up
There’s always room for improvement, but the early results of TBM are promising. Previously, we might have heard, “Look out, IT is doing something again,” and business areas would brace for impact. Now, they’re naturally gravitating to the conversation to see what they might learn or how they might benefit. And we’ve seen a grassroots carryover effort around enterprise agility, with support from the top down.
It’s very exciting to see the business areas reaching out to learn from IT and the techniques we’re using. We look forward to developing stronger, more effective partnerships across the company in the coming years.
»Read more on Apptio: Bill of IT changes the way your business partners consume IT