Finally, a Real Way to Measure IT's Value

We've all read plenty of gloomy headlines lately, but one bright spot in the IT world has been the services sector.

And the continued strengthening in that area offers one unexpected—and perhaps happy—result: the ability to finally put a real value on corporate IT departments.

That's what Barry Brunsman, managing director with consulting firm Alvarez & Marsal, sees happening. His thesis is simple, but not something that we hear mentioned often. The growth of IT services has created a healthy market that essentially puts a price on IT, he says. The establishment of that value, in turn, allows IT shops to quantify their own performance against what's available in the market.

"The 'value' of IT has been a debate; in the future, by 2015, it won't be a debate--it'll be, you're either beating the market or not beating the market," Brunsman told me during a discussion about the future of IT organizations."

The big idea here: by comparing their value versus what's available outside, CIOs and their deputies can ultimately—finally—prove their value to their bosses.

Brunsman understands that it might sound like a "full-frontal assault" on IT, but he posits that it's the opposite:

"I've done a lot of IT assessments and I've never seen a case where that IT organization isn't better than the market at something, maybe even lots of things. If you hold yourself to the standards of the marketplace and can show and demonstrate time and again that you're a better provider than the marketplace, that translates into shareholder value."

Brunsman's right that the value of IT has been a debate for many years. His idea that IT services provide a good measuring stick makes a lot of sense.

He concludes:

"There's been great frustration with the idea of IT as a commodity. The truth is, the emergence of IT as a commodity creates a fundamental opportunity for IT organizations to price their services relative to the market. If you're beating it, you're winning. You're delivering value to the organization that is not readily available in the marketplace. That's a very powerful thing."

So what do you think, IT managers: do IT services give you a solid basis for comparison for your own shop's ability? Are you thinking about it in those terms?