Information Technology adds value
-
Upload
terry-white -
Category
Business
-
view
626 -
download
0
description
Transcript of Information Technology adds value
Who says IT doesn’t add value
Who says IT doesn’t add valueMostly CFOs (Have a look at the many discussions by CFOs on IT value)
Who says IT doesn’t add valueMostly CFOs
That’s because IT doesn’t prove hard number value
Who says IT doesn’t add valueMostly CFOs
That’s because IT doesn’t prove hard number value
And ROI is a really narrow way of describing IT value anyway So how do we describe IT value in a way that makes sense to CFOs?
Who says IT doesn’t add valueBut let’s not take it out on CFOs (they don’t know better)
Who says IT doesn’t add valueBut let’s not take it out on CFOs (they don’t know better)
CIOs also say IT doesn’t add value
Who says IT doesn’t add valueBut let’s not take it out on CFOs (they don’t know better)
CIOs also say IT doesn’t add value
I’m talking at a conference for CIOs in London in May, and one of the agenda items is:
“Does IT add value and what can we do about it?”
Who says IT doesn’t add valueBut let’s not take it out on CFOs (they don’t know better)
CIOs also say IT doesn’t add value
I’m talking at a conference for CIOs in London in May, and one of the agenda items is:
“Does IT add value and what can we do about it?”
Can you see that the topic assumes that IT doesn’t add value?
Who says IT doesn’t add valueBut let’s not take it out on CFOs (they don’t know better)
CIOs also say IT doesn’t add value
I’m talking at a conference for CIOs in London in May, and one of the agenda items is:
“Does IT add value and what can we do about it?”
Last year I was at the same conference and one of the agenda items was:
Who says IT doesn’t add valueBut let’s not take it out on CFOs (they don’t know better)
CIOs also say IT doesn’t add value
I’m talking at a conference for CIOs in London in May, and one of the agenda items is:
“Where does IT add value and what can we do about it?”
Last year I was at the same conference and one of the agenda items was:
You guessed it.
Who says IT doesn’t add valueCIOs also “say” IT doesn’t add value, by their resolute failure to actually prove benefits
Who says IT doesn’t add valueCIOs also “say” IT doesn’t add value, by their resolute failure to actually prove benefits
So the equation looks like this:
Spend $1 million on an IT project based on a business case that says the return will be $2 million…
Who says IT doesn’t add valueCIOs also “say” IT doesn’t add value, by their resolute failure to actually prove benefits
So the equation looks like this:
Spend $1 million on an IT project based on a business case that says the return will be $2 million
Then ignore the business case
Who says IT doesn’t add valueCIOs also “say” IT doesn’t add value, by their resolute failure to actually prove benefits
So the equation looks like this:
Spend $1 million on an IT project based on a business case that says the return will be $2 million
Then ignore the business case Don’t develop a benefits realisation plan Don’t try to track benefits Just get on with the next project (It’s a business problem anyway)
Who says IT doesn’t add valueCIOs also “say” IT doesn’t add value, by their resolute failure to actually prove benefits
So the equation looks like this:
Spend $1 million on an IT project based on a business case that says the return will be $2 million
Then ignore the business caseDon’t develop a benefits realisation planDon’t try to track benefitsJust get on with the next project (It’s a business problem anyway)
And forevermore talk about the cost of running IT.Never talk about benefits
Who says IT doesn’t add valueCIOs also “say” IT doesn’t add value, by their resolute failure to actually prove benefits
So the equation looks like this:
Spend $1 million on an IT project based on a business case that says the return will be $2 million
Then ignore the business caseDon’t develop a benefits realisation planDon’t try to track benefitsJust get on with the next project (It’s a business problem anyway)Oh yes. Ask for more money from the CFO
Of course IT does provide valueBut the secret sauce is…
Of course IT does provide valueBut the secret sauce is…The way you describe value
Definition of valueValue (n): The relative worth, merit, or importance of something
Definition of valueValue (n): The relative worth, merit, or importance of something
Value must be described relative to something
Definition of valueValue (n): The relative worth, merit, or importance of something
Value must be described relative to something
Value must have merit(something justifiable)
Definition of valueValue (n): The relative worth, merit, or importance of something
Value must be described relative to something
Value must have merit(something justifiable)
Value must be important to the business
Definition of valueValue (n): The relative worth, merit, or importance of something
So IT value should be described in terms of:• What it compares to (not having it; doing it manually, customer retention)• What justifies it (keep the business running; improve the business, new
business)• Why it is important (99.99% SLA compliance isn’t important to the business
(relatively). Business results are important)
There are five types of IT value that fit these criteriaAnd only one “adds” value
There are five types of IT value that fit these criteriaThink about what IT does for the business:
There are five types of IT value that fit these criteriaThink about what IT does for the business:
Supports existing business operations
There are five types of IT value that fit these criteriaThink about what IT does for the business:
Supports existing business operations
Fixes things when they break
There are five types of IT value that fit these criteriaThink about what IT does for the business:
Supports existing business operations
Fixes things when they break
Services the IT “engine” that supports the business
There are five types of IT value that fit these criteriaThink about what IT does for the business:
Supports existing business operations
Fixes things when they break
Services the IT “engine” that supports the business
Helps the business improve their operations
There are five types of IT value that fit these criteriaThink about what IT does for the business:
Supports existing business operations
Fixes things when they break
Services the IT “engine” that supports the business
Helps the business improve their operations
Provides new IT supported products, markets, channels
There are five types of IT value that fit these criteriaAnd IT value works the same way:
Supports existing business operations
Fixes things when they break
Services the IT “engine” that supports the business
The added value that IT can help the business get from current operations
Provides new IT supported products, markets, channels
The value inherent in the systems that we provide
The value of continuity
The value of sustainability (we’ll still be viable next year)
Helps the business improve their operations
The value that IT can create for the business
There are five types of IT value that fit these criteriaAnd IT value works the same way:
Supports existing business operations
Fixes things when they break
Services the IT “engine” that supports the business
Provides new IT supported products, markets, channels
The value inherent in the systems that we provide
Helps the business improve their operations
Here’s the problem. We don’t get the full and proper use from our systems.
So we need to initiate a “value unlock” initiative
There are five types of IT value that fit these criteriaAnd IT value works the same way:
Supports existing business operations
Fixes things when they break
Services the IT “engine” that supports the business
Provides new IT supported products, markets, channels
The value of continuity
Helps the business improve their operations
This is the value preservation layer: DR, BCM, Rapid problem resolution,
compliance with the law, all preserve value
There are five types of IT value that fit these criteriaAnd IT value works the same way:
Supports existing business operations
Fixes things when they break
Services the IT “engine” that supports the business
Provides new IT supported products, markets, channels
The value of sustainability (we’ll still be viable next year)
Helps the business improve their operations
You can choose not to service your car every 10 000 km. Or you can sustain the value of your existing engine. IT
Maintenance is a sustainability value
There are five types of IT value that fit these criteriaAnd IT value works the same way:
Supports existing business operations
Fixes things when they break
Services the IT “engine” that supports the business
The added value that IT can help the business get from current operations
Provides new IT supported products, markets, channels
Helps the business improve their operations
This is the value of doing things better. The value of efficiency and effectiveness. Many of our existing business cases target this “value
add” dimension only
There are five types of IT value that fit these criteriaAnd IT value works the same way:
Supports existing business operations
Fixes things when they break
Services the IT “engine” that supports the business
Provides new IT supported products, markets, channels
Helps the business improve their operations
The value that IT can create for the business
This value depends on IT maturity and business strategy (and maturity).
But this “value creation” layer could be the most productive
There are five types of IT value that fit these criteriaAnd IT value works the same way:
Supports existing business operations
Fixes things when they break
Services the IT “engine” that supports the business
Value add
Provides new IT supported products, markets, channels
Value unlock
Value preservation
Sustainability value
Helps the business improve their operations
Value creation
Intangible value has been proven to come before tangible value – at different times through the life-cycle
Idea Test the idea
Design and
build
Implement
Operate
Retire
Early adoption
MaturityMajority adoption
Initiate
AttentionMeaning
Create Operate
1 2 3 5 6 7 84
Intangibles
TangiblesPotential Value
Until you’ve installed something, it’s only potential value
There’s real “value” for IT to chase the intangible values first
Intangible value has been proven to come before tangible value – at different times through the life-cycle
Idea Test the idea
Design and
build
Implement
Operate
Retire
Early adoption
MaturityMajority adoption
Initiate
AttentionMeaning
Create Operate
1 2 3 5 6 7 84
Intangibles
TangiblesPotential Value
Notice also that potential value grows after you’ve had the business case passed, as your understanding of the
problem/solution dimension increases
Business case
Intangible value has been proven to come before tangible value – at different times through the life-cycle
Idea Test the idea
Design and
build
Implement
Operate
Retire
Early adoption
MaturityMajority adoption
Initiate
AttentionMeaning
Create Operate
1 2 3 5 6 7 84
Intangibles
TangiblesPotential Value
Notice also that potential value grows after you’ve had the business case passed, as your understanding of the
problem/solution dimension increases
Business case
So keep a benefits register, that is subject to changeas understanding improves
Look for different value at different life-cycle stages
Idea Test the idea
Design and build
Implement
Operate
Retire
Early adoption
MaturityMajority adoption
Plan
AttentionMeaning
Build Run
CostMonthly
cost
Monthly cost
Monthly cost Monthly
cost Monthly cost
Monthly cost
Cost
Value potential
Value potential
Value potential
Value potential
IntangibleValue
Value add /
creation
IntangibleValue
Creation; Add
Sustain value
Cost-cutValue
UnlockValue
1 2 3 5 6 7 8
Value preservation
4
Look for different value at different life-cycle stages
Idea Test the idea
Design and build
Implement
Operate
Retire
Early adoption
MaturityMajority adoption
Plan
AttentionMeaning
Build Run
CostMonthly
cost
Monthly cost
Monthly cost Monthly
cost Monthly cost
Monthly cost
Cost
Value potential
Value potential
Value potential
Value potential
IntangibleValue
Value add /
creation
IntangibleValue
Creation; Add
Sustain value
Cost-cutValue
UnlockValue
1 2 3 5 6 7 8
Value preservation
4
Your benefits realisation plan operates here
Your value
unlock plan
IT ADDS VALUE – IT’S UP TO YOU TO PROVE IT
Terry [email protected]