P&L Statements Help Win Business Fans for IT

Ann All

The emphasis was squarely on the "business" in business technology in a wide-ranging panel discussion last night at the inaugural Midmarket CIO Forum in Orlando, sponsored by IT Business Edge. Panel leader and ITBE blogger Don Tennant managed to cram in a big selection of topics, from virtualization to Microsoft Share Point to supporting a distributed workforce to Windows 7, all under the broader umbrella topic of "doing more with less," a popular CIO mantra.


One idea that really grabbed the crowd, judging by the Q&A session following the panel, was creating individual profit and loss statements for every enterprise application, a strategy employed by Linda Hughes, CIO for courier services company BeavEx. As Hughes explained, many CIOs concentrate on building a business case and proving ROI when rolling out an app but tend to lose sight of how it's performing over time. Her solution was to create individual P&L statements for every app.


The statements helped win fans throughout the company for the IT department, as they're presented in language business leaders can understand and appreciate. When one attendee asked Hughes whether she factored in items like availability and disaster recovery, which obviously add costs, she said she did, noting those considerations were bundled into the loss column. However, she added, "We don't talk about things like availability because they don't mean anything to business users." Illustrating the value of each app also helps the company make good decisions by focusing their strongest efforts on the ones generating profit for BeavEx., Hughes said.


She won the support of users by enlisting them to create metrics for the apps. "I didn't want it to come across like it was me in a back room somewhere making stuff up," Hughes explained.


Another panelist, Rick Rhodes, Chief Deputy of IT for the Polk County (Fla.) tax collector, similarly went to every department head in his organization about a year-and-a-half ago to define individual performance requirements for each of the organization's applications. He uses that information to produce a monthly P&L report. Like Hughes, he emphasized the value of "realizing which applications are profitable and which aren't" and said it's also helped the organization recognize opportunities to modify their business processes for added efficiency.

Add Comment      Leave a comment on this blog post
Mar 18, 2010 1:16 AM Elliot Ross Elliot Ross  says:

I love that concept -

I would be interesting in what metrics & 'how' were bundled into the profit column.


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