The IT Value Disconnect
We've written about this issue before, but it's not old news. It's all part of the struggle to align IT with the business, but there's more specificity here. And it might be the biggest problem CIOs will have to rectify. Forrester's CIO guru, Bobby Cameron, takes a deep look at the issue in a recent research report. One striking finding (among many): Only a third of the IT leaders in a Forrester survey measured postproduction to see if projects delivered the value that the business case anticipated. And less than half that number track IT's operations costs associated with enabling key business activities. I've seen some troubling data on measuring IT's value, but that might be the most disturbing figure I've seen in a while. Check out Cameron's report for more insight into why this disconnect occurs--and what CIOs can do to overcome it. One way to attack the problem is to get a better understanding of how CIOs should promote the benefits their shops deliver to the C-suite. Dan Roberts, founder and president of Ouellette & Associates, offers a solid roadmap. It's a great start to getting to where you need to be. And tell us, IT execs: How does your company measure IT's value? And what are you doing to market IT's value to your business leaders? |
Comments (1)
Oh, Good Lord! More of the same!
How many years do we need to talk about this problem? This is a simple problem with no obvious answer. IT projects are no more difficult to quantify than any other capital or operational expenditure.
There are only a few fundamental questions that any IT project needs to answer and an end-user should be able to answer.
1. Who am in the organization? This helps to determine the kinds of problems you solve and the information that you need.
2. What do I want to know?.
3. Why do I want to know it?
4. What am I going to do with it when I get it?
5. How will it affect my daily work?
6. Was it worth the time, effort and money to do this?
So why do we fail? It's easy to get hard numbers when you increase sales or cut expenses...that is IF the business unit keeps accurate detailed records. Otherwise the GL should be helpful. The hard part is when projects are done for intangible benefits. My favorite is "better managerial decision making." Great. If the company can't identify and quantify the benefits that occur BECAUSE of better management then no CIO is going to be able to justify objectively the costs of implementing IT projects that support mostly intangible benefits. It is the responsibility of the BUSINESS UNITS to show the benefits of the technology that has been implemented for them.
As much as I HATE a chargeback system for IT services it does FORCE business unit management to justify the expenditure. Of course since IT is SO ingrained within the daily operations and work methods and work practices it may now be just a "normal" cost of doing business since we can't or won't revert to older methods.
VJM
Posted by Vincent J. Marchionni, Jr. MBA, MS | September 11, 2009 10:17 AM