Tired of spending hours pulling and sending service-based reports related to understanding IT cost that simply don’t connect with their intended audiences?
It might happen more than you think, in fact—it occurs in CIO offices across the country every day. IT leaders and their teams diligently prepare reports filled with data to inform business leaders and hold business unit owners accountable. Yet, leaders and owners often complain that the reports are confusing, indigestible, or meaningless.
When that happens, it’s not for lack of trying on IT’s part. Odds are, the reports you are sending are full of data—and that could be the problem. What your fellow leaders need isn’t data only.
They need context and direction too.
Which means, politics matter. To influence business leaders, you must take your IT departmental reports from confusing to compelling. The good news is, it’s relatively easy. Just follow these four steps to dramatically elevate your IT reporting strategy.
Step 1: Identify the WHY behind reporting IT cost
The reason you are reporting is to influence a decision or cause an action.
You can’t influence decisions without knowing what decisions are being made. You can’t cause actions unless you know what people need to act. A mentor of mine shared some good advice with me once upon a time. He said, “Know where you’re going before you start.” He was talking about business planning, but it applies to just about everything in life – including the service-based IT reporting challenge.
Before sending a report, take a step back and define your reporting strategy. Ask: What do the business units and/or the organization need to know? What questions are they struggling to answer? Is it, “What levers do I have to reduce my IT costs without impacting my business performance?” Is it, “Do the IT investments my business has made align with our overall business objectives?” What do you need to answer those questions or overcome those objections?
Having a clear view of the end result is the first step in overcoming the challenges to get there. Find the business units’ pain points and work backward from there to help solve them.
Step 2: Identify the Right Data Points to Share
Once you’ve identified the decisions or actions you need to support, it’s time to determine the data points you need to influence them. If you’re like most organizations, you have a ton of data to work with – maybe even too much. From the systems you’re operating to the financials, there are literally thousands of points to plot. The data isn’t the problem. It’s what to do with the data.
The key is turning your data into information. And you do that by taking pieces of related data and combining them to provide a new level of understanding—like a ratio or a benchmark.
Miles per gallon is a great example of combining disparate data points to make informed decisions. MPG is derived from two different data points (the miles you travel, and the gallons of gas you consume). Both metrics are meaningless when presented alone. But, if you combine the distance you need to transport a product and the amount of fuel you have available, you can make a more informed decision about which vehicle to use (the Ford F250, or the economy car) in order to arrive on budget. That’s turning data into information. And that supports better decision-making.
So don’t just gather and sort your data. Find ways to bring seemingly disparate data points together to create useful information that helps answer key questions.
Step 3: Document The Context Surrounding The Data
Data is meaningless without context. (tweet this)
That’s because, on its own, the data doesn’t tell a story. The data may show that IT costs are steady, or that consumption is average. But that doesn’t really tell the business leader anything. Most throw their hands in the air. They don’t know if the data is good, if it’s bad, or what it even means.
For example, email storage costs may have been up 10% last quarter. At first glance, that increase will raise a red flag. But the context is that a new department including 200 team members was added to the organization, plus 15 new hires were added, more than doubling the employee base of the business unit over last quarter’s headcount. So, this new email storage cost shows efficiency in IT spend with regard to spend on the added personnel, as well as a per person cost reduction in email storage expense quarter on quarter.
You need to do more than share information with your colleagues. You need to convey what it’s trying to tell them. “Here’s what we know. Here’s why that’s good or bad. Here’s what it means to the organization.” If you don’t give them that context, they’ll fill it in on their own. And that will lead to misunderstanding and mistakes.
People don’t make decisions based on information; they make decisions based on context. And context is what you must provide in order to truly support organizational decision-making.
Step 4: Provide Meaningful & Actionable Insights Within Your Reports
If you think of your organization as a moving vehicle, most IT cost reporting gives the “driver” a rear view. That’s because it generally tracks past decisions and their impact. That’s obviously important, but nowhere near as important as what’s happening out the windshield. It’s imperative that your reporting focuses on what’s coming down the road.
As the organization’s IT leader, your role is to influence optimal decision-making. And you can’t do that without offering meaningful insights. Each report you issue should be a window into future options and opportunities. Link the context you’ve provided to the business problems the organization is trying to solve. Identify opportunities each option will open up (or eliminate). Convey what the future will look like for the organization if they make the decisions under consideration.
To be genuinely meaningful, IT financial reporting must provide leaders with both an accounting of what happened and a forecast of the future. It’s the only way to fuel optimal decision-making.
Compelling IT Cost Reporting Is Possible
Very rarely does ITFM reporting provide structured data, information, context and insight. But you can’t have a useful decision-making conversation with the organization without them. So include all four, and you’ll take your IT cost reporting from confusing to compelling in no time.