In my view the IT function has two main challenges, namely to justify both its operational and strategic relevance.

Proving operational relevance may seem far-fetched. Everyone knows that without IT most organisations would not survive but I am referring here to the IT function and not just the technology. So the question business leaders are asking is whether their IT function is delivering the maximum value for the associated investment, swiftly followed by who might provide us with better value.

Sadly, value inversely equates to cost when it comes to judging the IT function's performance. So typical IT function metrics include IT spend year-on-year, electricity spend and cost per transaction.

These are all relevant and fit nicely into a spreadsheet but they ultimately position the IT function as a cost centre, and an expensive one at that. Budget constraints leave no room for genuine value-creating initiatives such as providing business process consultancy to the users, creating a cross-lines-of-business scalable platform, and exploring technologies that may disrupt the market status quo.

I would encourage CIOs to explore outsourcing as a way to shake off the ‘chief IT manager' branding and reposition IT as being business-oriented. The savings from this activity could be channelled into more strategically relevant initiatives.

Having done that, there is still the issue of how performance is to be judged. If the IT function is going to be strategically relevant it needs to embrace the metrics on which the organisation as a whole are judged. That may be share price, profit, patients treated, funds raised or cars clamped.

The counter argument is that one cannot hold IT solely accountable for business performance. And this plays to my main point that the business value the IT function delivers does not come from the technology. In fact, it comes from the users.

It would be unfair to blame the telephone service provider for a poor telesales campaign, so why should the IT function be blamed when any aspect of the business that uses IT underperforms? Thus the IT function and the user community should be collectively judged on business performance.

The credit crunch was an opportunity for the IT function to demonstrate its strategic relevance. This hasn't happened and radical changes are needed for the sake of the IT industry, the talent and you the CIO.

About the author:
Ade McCormack advises business leaders on IT matters. Visit his blog at www.auridian.com