As a chief technology officer (CTO), I’ve talked with many chief financial officers (CFOs) who view IT operations (ops) departments as a cost center, i.e. an expense or loss. But a strong ops group has the potential to drive more revenue.
Any company with a website requires high availability and high reliability in order to generate revenue and retain customers. This is painfully true in the software as a service (SaaS) world for retailers. Operational excellence, whether measured in availability, security or performance, isn’t merely “table stakes;” it is fundamental to the success of the business. Therefore, when investing in your operations organization, CFOs need to shift their view of IT ops from cost center to revenue driver.
Suppose ops tools were viewed as revenue generators, much as something like Salesforce is viewed as by the sales department. This type of software is considered a necessary investment in the successful pursuit of revenue. I haven’t run a survey, but I think if I asked vice presidents of sales what they would do if their CFOs told them they could not buy a CRM system, the VPs would quit or simply not sign up to hit revenue targets. Businesses today spend heavily on a solid CRM because they know any dollars spent there pay off immediately and directly impact money spent on sales salaries and commissions.
The same applies to IT operations, the department responsible for maintaining uptime and guaranteeing high reliability. Gartner industry surveys, for example, estimate the cost of downtime to be $5,600 per minute on average. It’s unreasonable to expect a CTO to exceed — or even meet — expectations without the proper tools. With the understanding that IT ops is a key value driver for businesses, CFOs can view IT ops tools expenditures in the same way as CRM software: highly leveraged dollars that allow ops teams to unlock the true value of a super-skilled workforce.
System reliability encompasses uptime, security, on-call management and performance, and it is a critical success factor in delivering a stellar experience to end users — be they customers or colleagues in other departments. Given the importance of high reliability, I’m shocked by how many companies manage their systems and teams with antiquated tools. To highlight on-call management in particular, the number of businesses that use manual processes and Excel spreadsheets to handle this key process is astounding. These businesses have not realized that operations is so much more than an internal function created as a byproduct of business growth. IT ops is central to the top line, the brand, customer experience, customer loyalty, and customer recommendations. Depriving IT ops of necessary tools in an attempt to save money is misguided. Much more money is lost through making poor use of expensive engineering time and sacrificing the quality of the customer experience. Smart software investments are essential to making the most of the megabucks CFOs spend on their engineers’ salaries.
CFOs, we CTOs are your strongest allies. We want to partner with you to generate revenue for the company. We in IT ops are not a cost center. Our performance — including people, processes and software — directly impacts revenue in the forms of uptime, business continuity and customer experience. IT ops teams are a company’s first line of defense in ensuring the experience of both external and internal customers exceeds expectations. Enable your CTO to drive revenue with modern IT operations software that cuts through the noise, complexity, fog of today’s growing IT operations environments.
Andrew Miklas is chief technology officer and a cofounder of PagerDuty.