In my last blog I spoke about the four principles that lead to better Cost Optimization. They were Transparency, Flexibility, Simplification and Discipline. I would like to take this opportunity to discuss Transparency in more detail.

How many times has IT management staff felt that their business partners don’t appreciate or understand the effort, time and money required to satisfy a business demand? On the other hand, how many times do you think business partners wonder if IT is focusing on the correct enterprise initiatives, or why their requests are not satisfied to their expectation level? The answer? Too many times to count on both hands. Without transparency, the worst fears of both sides and all stakeholders become a reality.

Webster defines Transparency as “the quality that makes something obvious or easy to understand.” At TransAccel, we view Transparency as a prerequisite for making better supply and demand decisions that are based on cutting the right costs in the right way, while maintaining what is most valuable to the organization. With transparency, the IT organization can participate in valuable discussions that balance costs with IT benefits.

Transparency should exist across all sectors of IT – but especially crucial are:

  • Portfolio management
  • IT budgeting, performance management, chargebacks and cost allocations
  • Measurement and benchmarking
  • Investment planning
  • IT service portfolios and catalogs
The first step toward Transparency is to divide IT services into two camps: those that support core (vital, no one else can do them) activities and operations, and those that could be outsourced if need be (non-core). Obviously, step one goes a long way in determining where resources and assets should be allocated (or not). For transparency and cost optimization to occur, defining and validating IT business services must be carried out, even if this is done through a series of incremental steps rather than a complete transformation.

Poor Transparency exists when the value and tradeoffs associated with IT spending are not quantitatively discussed within the larger context of business strategy and goals. Typical results of this information disconnect are inaccurate budget forecasting, inefficient investment planning, and the wrong projects draining away resources, to name a few. Another consequence? Prior optimization goals are often repeated or even increased in following years.

Benefits of Transparency include better demand and supply management, budget forecasting, investment planning, increased governance, respect from business partners, identification of business-valued initiatives, and the elimination of non-core and non-differentiating resource-sapping projects.

The goal is to run IT like a business. TransAccel would be happy to assist your organization with aligning IT services and activities to business goals, and mapping those services to interdependencies and resource requirements.

As organizations strive to achieve leaner and more cost effective IT departments, Transparency is one of four basic cost optimization principles that will allow you to drop additional coins into your piggy bank.