Home opinion-and-analysis The-Wired-CIO Business finance for the IT professional
If you are like me you espouse a view that a good IT department should not be seen as a cost to the business, and that it ought rightly be considered a strategic and operational division. Yet, at the end of the day it is all about numbers. The smart and forward-thinking IT leader will get a grip on the concepts that matter, and knowing these will help your own agenda.

I've written previously on the topic that good IT may well carry a price tag but at the end of the day it is not a cost to the business, but a benefit.

After all, if your company's IT department is not adding value, providing competitive advantages and enabling company employees to optimise their own job performance then what's the point? You should simply outsource an IT department which exists solely to 'keep the lights on'.

Now, you may be like me, in that you're a technical person and you've risen to the role of CIO or IT Manager and now find yourself spending more time on board reports than network analysis, more time on budgets than database tuning, more time on project planning than running your servers it's important you learn the lingo of the company executive.

This is similarly true for any other new manager who has come 'off the tools', so to speak, and gained their seat at the table via a combination of skill and experience and leadership rather than the alternate (and viable) route of a business or management background.

At the highest echelons a business boils down to numbers and the disciplined control of those numbers. Understanding these numbers and this jargon allows the IT leader to focus on them more easily, and to discuss them articulately and intelligently with superiors and colleagues alike.


The first thing you need to know is EBIT. This means simply 'Earnings Before Interest and Tax.'

EBIT is fundamentally the company's overall revenue minus operating expenses, excluding tax and income.

You might think this sounds like a no-brainer. After all, profit is revenue minus expenses, right? Well, yes, but the differentiating factor here is the 'before interest and tax'.



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David M Williams

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David has been computing since 1984 where he instantly gravitated to the family Commodore 64. He completed a Bachelor of Computer Science degree from 1990 to 1992, commencing full-time employment as a systems analyst at the end of that year. Within two years, he returned to his alma mater, the University of Newcastle, as a UNIX systems manager. This was a crucial time for UNIX at the University with the advent of the World-Wide-Web and the decline of VMS. David moved on to a brief stint in consulting, before returning to the University as IT Manager in 1998. In 2001, he joined an international software company as Asia-Pacific troubleshooter, specialising in AIX, HP/UX, Solaris and database systems. Settling down in Newcastle, David then found niche roles delivering hard-core tech to the recruitment industry and presently is the Chief Information Officer for a national resources company where he particularly specialises in mergers and acquisitions and enterprise applications.






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