Unlocking Business Value From IT

Unlocking Business Value From IT BY CORINNE BERNSTEIN BYCOF THE INNOVATION VALUE INSTITUTE OF th«j!N;)imiiiil University of Ireland fNUl), Maynooth —a consortium with memhers that include heavy- weights in business and academia— has unveiled a managem ent road map designed to optimize business value derived frt)m IT investments. The purpose of the IVI's IT Capability Maturity Framework (IT-CMF) is to provide an end-to-end integrated framework to help IT executives manage the challenges of developing their organizations' technology capabilities while delivering demon- strable value. "Companies typically invest 1 percent to 5 percent of revenue in IT, but without a way to measure and maxi- mize the return from these investments, their IT organizations cannot move from cost centers to value centers," Martin Curl ey, adjunct professor of technology and business at NUI, Maynooth. and global director of IT innovation at Intel, said during a presentation. Although optimizing tbe value of IT is a top priority in today's tough economy, there has been no com- prehensive, standardized framework for making investment decisions. Aiming to address this problem, the IVI has been developing and testing ways to align IT investment with business results. Formed in 2006. the consortium has more than 30 members —incl ud- ing Tbe Boston Consulting Cîroup, BP, Chevron, Ernst & Young, Intel, Microsoft and SAP—and it's growing. "Now is a perfect time to release the ITCMl''," Sheila Upton, director of technology and security risk services at Ernst & Young and an IVI board member, tells BaseOm. "The importance of deriving value doesn't go away because you're under cost pressure." In fact, she adds, the downturn has created an unprecedented situation. "A number of organizations that are not in a bad situation want to come out of tbe downturn in a good posi- tion," Upton explains. "So they need to be innovative." Tbe IT-CMF provides a five-stage maturity model that can be used as a framework for mapping out IT improvements. It consists of four macroprocesses: 1 . Managing IT like a business: shifting the focus trom technology and production to customers and services 2 . Managing the IT budget: invest- ing in innovative ITsolutions that deliver better value and performance for the business 3. Managing the IT capability: managing IT assets throughout the value chain and developing core competencies 4. Managing IT for business value: connecting IT investments to over- all business b enefits. The IT-CMF identifies 36 processes covering all activities in an IT department and categorizes them under these four macroprocesses. An assessment of an IT organization's maturity across these 36 processes — along with comparisons with industry benchmarks and best practices—will identify a company's maturity gaps, as well as opportunities for value cre- ation, tbe IVI says. To date, about 250 CIOs and IT executives bave taken IVI training courses, and the consortium is plan- ning about 50 pilot programs in 2009. "Piloting helps make sure you have the right content and confirms wheth- er the framework is right," Upton says. "Companies that have begun testing the frame have seen immedi- ate value." Intel began testing tbe IT-CMF in 2007 and, as a result, it bas a better way of measuring its performance and identifying where it sbould be, Intel CIO Diane Bryant said at the presentation. "The IT-CMF provides a holis- tic view of how CIOs set priorities, reduce complexity and frame decisions based on business value so that they are optimized for the company, not IT," Bryant explained. She added that by sharing their collective knowl- edge, companies will be better able to solve their structural problems. The IVI estimates that data shi)w- ing returns on investment for IVI members will be available by 2010, once pilot stu(iy recomm endations have been implemented and studied. ^ Please send questions and comments on these GamePlan articles to [email protected]. WWW.BASELINEMAG.COM

Unlocking Business Value From IT

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