Delivering IT Value
Mon Jul 21, 2003 - Mon Jul 21, 2003
Demonstrating business value has never been more important for IT organizations. Unfortunately, measuring and communicating IT value is not a straightforward calculation, particularly where infrastructure activities are concerned. Senior IT practitioners met for a one-day session to focus on this challenge and to compare their experiences with various approaches. Several themes emerged from this discussion:
IT value demands a business perspective
- The value of IT, like any service, is defined by those who use and pay for it.
- Value should be expressed in business terms (e.g., processing cost per policy) rather than technical terms
(e.g., cost per MIPS).
- Value cannot be adequately measured by financial measures such as ROI or TCO alone.
- IT activities should be valued in terms of their support for a companys business goals.
There are no universal rules for calculating value.
- Companies differ in terms of their market context, business strategy, internal structures, and
culture.
- The bottom line value of a given project cannot be understood without a baseline understanding of a
company's strategic goals.
- A classification framework presented by CANADA LIFE provides a basis for understanding companies' IT
needs in light of their broad strategic goals.
Portfolio management can support strategic alignment.
- THE BETA GROUP advocated using portfolio management to draw an explicit linkage between IT activities
and the business goals they support.
- Rank ordering IT activities according to cost, quality, and alignment provides an opportunity to
communicate value and reallocate resources to improve alignment.
- Portfolio management should cover the entirety of IT activities, not just development projects.
Credibility of IT organizations depends on alignment.
- Some IT organizations find themselves on the defensive, their business leaders having lost faith in
their ability to deliver strategic value.
- Frustrated business leaders may look to external consultants for advice and new initiatives.
- Internal IT organizations are then left to operate and maintain a hodgepodge of systems in a reactive,
facilities management sort of role.
- SCOTIABANK and other discussion participants described their success in breaking this cycle through better
alignment with their business customers.
For further details about this meeting, see the full Meeting Summary referenced below or select from the menu at right.
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