Governance & Business Value Communication with AIOps.

Jun 21, 2021. By S V Aditya

Tweet Share Share

Governance & Business Value Communication with AIOps

Todays IT infrastructure is filled with contrasts. It requires complete automation and control but needs to be decentralized. It requires rapid scaling up to meet business needs but has to do this without high costs. It also needs to be platform-independent and yet compatible with most systems. Managing these contrasts is where IT Governance comes into play. CIOs and higher-level managers work to align the technological challenges and contrast with the business goals of an enterprise. This requires a deep understanding of the business value of IT. More critically, it requires that CIOs be able to communicate the value of IT to the C-suite. The success of this communication decides their budgets, their resources, and the resource allocation plans for every investment cycle.

Business Value of IT

However, communicating this business value is a Herculean challenge. Gartner research shows that 63% of CIOs often fail at demonstrating the business value of IT Operations. This failure is a sum of two problems. Firstly, most leaders focus on operational performance metrics or technologies - which do not translate well into business-focused CFOs and CEOs. Secondly, even when CIOs want to communicate the business value they are often stymied by a lack of precise data to communicate their viewpoint. As we move up the executive chain, most of the low-level information is abstracted away. At the CIO level, they only have access to the summary technical performance of regions and the business revenues of regions. It is hard to draw direct causation between the two as there could be several other factors influencing the business outcomes. Hence the understanding of issues and data at the lowest level, where the influence is most directly visible, does not translate to higher levels like Regions or Business services. This means that CIOs are reliant on middle management to demonstrate RoI, which they do in terms of delivery of technology or platforms with only a minor focus on business benefits and outcomes. As a result, even CIOs talk in terms of technology or platforms instead of direct business value, reducing the impact of their interactions with the C-suite. Moreover, with the growth of hybrid and multi-cloud operations, the business value generated is split across multiple providers and platforms. In addition, increasing dependence on edge computing is pushing infrastructure out to edge nodes and even consumer devices. Tracking business value requires consolidating all of this information across all different providers and different infrastructure components in a coherent way that makes sense to business decision-makers.

AIOps for Business Value Dashboards

This is exactly what AIOps can help with. Most AIOps platforms focus only on the observation aspects while a few move into automation as well. However, AIOps platforms collect information from across the entire IT stack and are designed to collect from all sources using modern standards like OpenTelemetry. This enables them to be in a unique position to create a single pane of glass solution for IT Operations. However, it doesn't stop at monitoring. To be able to assist in Governance, AIOps platforms have to be designed for facilitating key requirements of managers. At that level, value is defined by the consumers and by business outcomes - not by technical metrics. So AIOps platforms have to meet three criteria. First, they have to be mapped to a granular Business Service down to every CI level. Secondly, they must assist business leaders in connecting the dots from technology to business. This can be done using Derived KPIs that can be built with business data. For example, consider a situation where the adoption of a capacity planning module improved the performance of the IT stack with greater availability in peak loads. This means nothing to CEOs or CFOs. However, revenue generated during this peak period can be measured in transactions and is stored in business data. A derived KPI can track the ratio of increased transactions to the marginal increase in costs from capacity upgrades. This gives a clear picture of the returns of this module. Similarly, another derived KPI can track the savings due to scaling down of capacity during low usage periods. Simply put, this allows CIOs and managers to create and track metrics that are clear and relevant. Thirdly, the AIOps platform needs to have flexible and configurable dashboards that are easily translated into presentations and reports - which is how the C-suite views this information.

Planning for the future

So far we've covered the aspects of operational reporting. However, CIOs and business leaders have also got to consider the aspects of growth and transformation spending. They have to make the business case for new investments and the adoption of new technologies. To do this, they have to engage stakeholders in the value definition process early on. By doing this, they create a collaborative framework for value definition. CIOs can then decide the right data for demonstrating the RoI of changes. At this point, they can define these items into the AIOps platform and let it do the legwork while they observe the direct business value change. By using AIOps prediction capability, they can even optimally plan resource requirements and understand the costs of modernization or upgrades to infrastructure. Consequently, they are better at understanding the Net Present Value and the potential RoI of their investments and can even communicate this to the other stakeholders.

To learn more about Algomox AIOps, please visit our AIOps Platform Page.

Share this blog.

Tweet Share Share