The business of IT isn’t about delivering technology for technology’s sake, but rather about improving business productivity and performance. The responsibility for managing IT assets inside of an enterprise often falls on the shoulders of the CIO. The CIO is also tasked with measuring and reporting on the value that IT is delivering.
At networking giant Cisco, Rebecca Jacoby has held the position of CIO for the last four years. Jacoby is currently involved in a process in which Cisco is transforming its IT operations into a services model. It’s a model that requires operational excellence and an understanding of what everything costs to deliver.
“When you’re the CIO you’re accountable to a lot of people,” Jacoby told InternetNews.com. “It goes without saying that I’m supposed to be operationally excellent and I’m supposed to be adding value to the business.”
Jacoby added that what enables her to stay in the good graces of Cisco CEO John Chambers is the fact that she is actually contributing to the growth strategy of the company in a measureable way. Jacoby explained that when you get into IT measurements, it’s important to understand what it is the business is trying to do.
“For example, the technical services organization is trying to deliver the most effective customer support operation and our IT works hand in hand to make sure we deliver that,” Jacoby said.
Jacoby added that in the context of looking at IT as a service and defining what the services are that IT delivers, Cisco IT has a very granular view.
“We’ve actually embarked on a set of things to be able to make sure that we understand what we spend every cent on, in the context of services within the organization,” Jacoby said. “Depending on the service, I can show you some incredible data.”
For example, Jacoby noted that for Cisco’s customer registry, they know that it costs a nickel to run a typical query for a set of customer information. In contrast, a complex query of the sort that might be used for marketing might cost as much as 50 cents.
“We can provide any kind of drilldown that the business wants,” Jacoby said.
Understanding the cost of IT is also about understanding all the elements of infrastructure that need to be in place to deliver a service.
“Applications don’t just exist by themselves,” Jacoby said. “What we’ve done organizationally in every way possible is to get everyone that delivers an end service to understand all the technical components that are coming together.”
In terms of how Jacoby reviews IT operations within Cisco, that’s a process that has also been evolving over the last four years. She noted that the traditional operations components of how the systems are performing is quantifiable anytime she wants to see the data.
“That data is most effectively delivered in a dashboard form and, to be honest, you don’t want to worry about it unless something goes wrong,” Jacoby said. “That’s a necessary part, but not necessarily a strategic part of what we do everyday.”
Looking beyond the IT as plumbing model, Jacoby’s CIO review process with her team members looks at total cost of ownership, service levels, investments as well as risk profile. Most importantly, Jacoby also has IT staff focus on understanding and reporting on cost per use.
“Who is using the service, how often is it being used and how much does it cost to deliver per use? And then we compare that to the value the service delivers,” Jacoby said. “Is the cost per use appropriate considering the value it delivers?”
Going a step further, Jacoby gets her staff to also try and benchmark the cost of the service. By doing so, Cisco’s IT can understand if the same service level can be delivered for a different cost and how it compares to the industry.