Communicating the value of IT spending to the business side of the house is always challenging. To make sure nothing is lost in translation, some financial firms are setting up IT business offices. This model helps business and IT leaders better collaborate, but it also helps manage IT value delivery by translating IT services into business terms, write Bob Reinhold, principal at Ernst & Young.

Any enterprise can create an IT business office, and it does not necessarily have to be a formal entity, Reinhold writes in a post at CIOInsight. Aligning IT management and communications practices with business units can work just as well.

To make an IT business office strategy work, both sides have to agree on how to define what constitutes value--transformative value and operation value--to the business. They have to agree on the goals and the standards that will be used to measure progress. Coming to an agreement on these basics gives the business units a better idea of what IT is about, and it empowers them to make better decisions. Both sides become more accountable. 

An organizational structure for gathering and reporting on the metrics that show IT value delivery has to be established, and processes, roles and responsibilities must be decided. "It is important to be pragmatic in this effort," Reinhold advises. "The business office function will fail if it requires a large bureaucracy or expensive custom reporting. In some cases, close proxies may need to be used for metrics that are difficult to capture and quantify."

Automating reporting processes and workflows will make the process more effective and efficient. Ultimately, deploying an IT business office--or a practice that incorporates the same strategy--should make IT more transparent to the business units and give them a better idea of what it takes to have some control over how IT costs are allocated. What's more, this function can offer benefits beyond internal communications improvements.

"An IT business office can enable improved communication with regulators, the board of directors and internal and external auditors. Firms can take a holistic, centralized look at the IT risk management function in response to business objectives, regulatory requirements and board directives, and demonstrate the maturity and reliability of IT processes to regulators, auditors and other stakeholders," Reinhold writes. 

For more:
- see Bob Reinhold's post at CIOInsight

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