As discussed in our recent post, IT cost transparency is defined as the knowledge of how business usage impacts the costs that are associated to IT. With the transition of IT into the new cloud and virtual systems, it is seen as a critical requirement for acceptance both inside the organization as well as outside. The many benefits allow an improved relationship between IT and the other business organizations, from the people and processes to the purchases (billing).

Initially IT had to battle with ‘chargeback’ as well as questions like ‘why is IT so expensive?’ But with this new business realignment the whole discussion centered on ‘IT bill’. The IT bill consists of monthly true-up costs, detailed reports from analytics on how IT spend, consumption management, a critical look at the areas which exceeded expenditure as well as those which under-spent. The service catalog for IT is enhanced while new IT services are continually mapped into the TBM model. With such a background, it becomes easy to look into how IT can be used by businesses to enable better performance.

Bottom line; IT cost transparency helps us make better decisions and make them faster. Here are four ways that IT cost transparency adds value to the business;

Cost inspires more action; when one sees a cost attached to something, they become biased to act. This could not be the case when you are looking at lots of unprocessed data. In fact, the mere site of ‘big data’ that is to be analyzed manually (not using automated means) often sacks whatever energies one could have to take any action.

IT cost transparency serves to improve the quality of the decisions made. IT cost transparency supplies credible information that is precise and can be relied upon for accurate decision making

There is less resistance when there is IT cost transparency. This is especially so when presenting the business board. With actual figures of cost and how they impact the organization’s performance, CIOs are bound to face less resistance as people tend to believe in actual figures.

IT cost transparency inspires change in organizational behavior. This is mostly experienced whenever there are changes in the costs and figures from IT cost transparency. Adjustments to align with the new changes in the market and in the organization often lead to change in behavior.

The transparency of the IT costs often lead to successful implementation of the initiatives. For some this might have been a great challenge before, but with the new real-time information it enables the project managers to provide guidance in a timely manner and keep it moving. The lack of financial analysis required by the line of business or project team allows the team to use the “big data” and move forward in a shorter timeframe.

In summary, the CIOs can easily discover new insights and act on them with IT cost transparency. The always-on environment of today’s market changes in a real-time manner and it requires the organizations to change and adapt in an agile manner, as quickly as possible. Have you implemented cost transparency across the business? How do you manage the alignment and accounting across the organizations, divisions and budgets? Share your story and solutions.