Electronic Cash News

The business case for consolidating IT functions from several business units is fairly easy to justify in terms of reduced labor, hardware, software, and maintenance costs. The question is - will there be improved service levels after the consolidation? On paper, at least, IT service levels should improve due to the increase depth of consolidate technical expertise and economies of scale.

On the other hand, there are many challenges with consolidating IT functions. The key challenges are with business units losing flexibility, creating a good IT service level agreement (SLA), and the new IT group meeting / exceeding the requirements of the SLA.

I have come in on the tail-end of an internal IT consolidation where no one thought there was a need to have a formal SLA between the new IT business unit and the other company’s business units. We ended up having to setup a new SLA, and then bring many of the IT functions back in-house because the separate IT business unit could not meet the terms of the SLA. Just like with any business contract, a good service level agreement for IT services sets everyone up for success.