Shining a light on maintenance

13.02.2006

In the past, IT might talk to the business units about investing in data centers and people doing "break-fix," Blake explains. "But that was IT telling the business in IT-speak what they're paying for," he says. "And the business couldn't really translate."

Today, he can tell business leaders how much it costs to run Kaiser Permanente's appointment systems or a class of PCs or laptops. With this view, Blake says, he and other business-unit leaders know how much systems cost to keep on and, perhaps more important, what value they provide to the organization. "This allows us to have a more informed conversation," he says. "And understanding your current costs allows you to better make those value decisions."

Having just recently achieved this transparency, Blake says, Kaiser Permanente has yet to start making the decisions that could yield savings. However, he adds, when he implemented a similar process at a large retailer, the results were quick and impressive. For example, Blake found that the company was spending more than $100,000 to maintain an application that generated a logistics report that only two people used and that could be obtained through other systems.

The transparent view of the maintenance budget that Mitre and Kaiser Permanente are achieving will slowly come to other companies, experts say, and it behooves CIOs to get started. "CFOs are actually starting to push back on this," says Mark Lutchen, a senior partner in the IT Effectiveness practice at PricewaterhouseCoopers.

CIOs who don't create greater visibility into -- and controls over -- their maintenance budgets won't be able to hold on much longer, says Lutchen, a former CIO at Pricewaterhouse-Coopers and the author of Managing IT as a Business: A Survival Guide for CEOs (John Wiley & Sons, 2003). "CFOs and CEOs aren't going to tolerate the lack of discipline. The new generation of executives is becoming savvier about IT; they're not afraid of it," he says. "They will force the issue."