Most IT organizations continue to struggle with explaining what they do to support their business unit customers, and what the business gets for its IT spend. As in any market, the customer compares what's available from its internal IT department to what's available on the open market. IT is compared to lower-cost alternatives - whether for desktop computers, email, infrastructure services or cloud computing. And one of the first questions is often "why does IT costs so much?"
These comparisons put pressure on the IT department even though they are typically not
"apples-to-apples". The enterprise IT organization may actually provide more value-added services than are offered by the external provider, but it has difficulty communicating that value effectively and consistently. And in many cases, the comparative IT cost data provided by IT is perceived as either too high level, or too technical and thus lacking business relevance.
Fortunately, there is a prescription for ending this frustration and moving from a "black box" mentality to a "glass box" approach with greater cost transparency. The first step is to define and publish the standard services IT offers - or can offer - in a Service Catalog.
With a newScale Service Catalog, IT can articulate the cost drivers and trade-offs for services in business terms. This addresses one of the major sources of business unit frustration - the inability to understand how business behavior drives IT service costs. Business unit executives and IT relationship managers can model how changes in these metrics will impact costs, for greater control of the "knobs" that dial costs up or down. The same can be provided for technical services, with visibility into the options and components that drive a higher price (whether comparing service tiers with higher availability or options for physical vs. virtual server hosting).
Another way to provide greater cost transparency is to help IT consumers understand their pricing options in the Service Catalog during the ordering process, so that they can make informed business decisions. With newScale, IT organizations can associate cost models with their service standards, and then automatically update those prices or costs in the Service Catalog. Those pricing options can be presented dynamically during the self-service ordering process, so the end user has the visibility they need when they need it.
newScale also provides the capability to track unit cost trends and analyze the consumption of IT services. This visibility facilitates better IT decisions by providing accurate information on the various cost components, the services provided, the users of services, and their total consumption. The ability to relate IT charges to business usage allows IT managers to more effectively and credibly communicate IT's value to the overall business, proactively manage consumption, and provide insight into IT costs - whether or not chargeback is used.
With newScale, your IT organization can embrace IT cost transparency. As a result, IT can operate more like a business within a business - by providing a catalog of services aligned with its customers' needs, well-defined costs and service tier options, an understanding of the demand and cost drivers, a process to track and invoice IT's customers based on their consumption of those services, and the visibility to identify opportunities for further cost savings.
To learn more, you can go to our Literature Request section to download the Solutions Overview Data Sheet.
