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IT Asset Managers and CIOs Should Work Together to Foster Digital Innovation.

India, July 15 -- However, shadow IT is often created by CIOs who lack the necessary IT budget or resources to participate in new business technology initiatives, according to Gartner, Inc. This presents a unique opportunity for IT asset managers to assist CIOs with digital business.

"Without a new approach, CIOs and their management teams can struggle to pay off life cycle technology debts left by failed or superseded digital technology initiatives," said Stewart Buchanan, research director at Gartner.

IT asset managers must help CIOs select the most sustainable digital business initiatives, which will attract enough funding to cover their full contract or asset life cycle costs.

To help IT asset managers best manage these challenges, Gartner has developed a three-stage IT asset management (ITAM) engagement plan for digital business.

IT asset managers must help business leaders learn from their mistakes

Acting in an advisory role on every technology procurement and risk management assessment will make CIOs far more influential than running a few digital business initiatives at their own financial risk. They should aim to become digital risk mitigators, leading a team that everyone in the business wants to consult for help and advice on digital business initiatives.

IT asset managers must help business leaders learn from their mistakes, even if the business initiatives prove successful. A successful digital technology initiative can prove even more dangerous than a failed one, as software licensing costs to process and store data from the Internet of Things could grow exponentially. A dramatic upturn in unforeseen demand can prove even more expensive to satisfy at short notice. Supply costs rise, unless negotiated as part of the initial deal. Worst of all, there may not be enough money in the allocated budget to meet demand.

IT asset managers can help their CIO select digital business initiatives

Despite being expected to promote digital technology by business users, experienced IT managers are selective because they have a more realistic understanding of the long-term costs, risks and benefits of technology. Whether acting as an internal service provider or a broker for external providers, the CIO and the ITAM team will be reluctant to buy more technology than they can sell on to business users in return for budget or another form of cost recovery, such as chargeback.

IT asset managers can help their CIO select digital business initiatives that will attract enough funding to cover their full contract or asset life cycle costs. Financial sustainability does not depend on the initial return on a digital business initiative. It depends on the organization's willingness to continue spending for as long as contractual commitments or business dependencies persist. IT asset managers must also help CIOs adapt to the need for shorter, more flexible contracts, where available.

Share financial risks with business sponsors and external providers

CIOs need to develop new funding methods before they can hope to access the digital technology elements in every business budget. IT spending on digital technology is at risk because business users are often better negotiators than the IT service managers who depend on them for funding. Direct engagement with suppliers ensures that the business sponsors behind each digital technology initiative will cover their costs.

IT asset managers understand where long-term business costs are being created, costs that cannot be covered by short-term cost recovery. A frequent problem arises when business users want a monthly consumption price without a long-term commitment to pay for specialist assets, which would take the IT organization or an external service provider many years to amortize.

CIOs should determine how best to share these costs with the business by identifying who should "own" the IT organization's assets. A common strategy is to encourage lines of business to run pilots and experiment with digital innovation, ready for the CIO to scale and industrialize them when they prove suitable for longer-term adoption. As a result, CIOs can control and manage these services without ever taking ownership of their contracts or assets.

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Published by HT Syndication with permission from The CTO Forum.

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Publication:The CTO Forum
Date:Jul 15, 2014
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