Tuesday, April 15, 2014

Which is the best way to demonstrate Multidimensional IT value

In order to demonstrate IT value, organizations need to first know wherein lies the IT value

Many IT organizations are at the crossroad, some high-performing IT organizations have built a solid value proposition and moved up its maturity to become the game changer and business catalyst for their companies. However, the majority of IT organizations get stuck in the lower-level of maturity and struggle to prove their unique value, for helping the business gain competitive advantage.  So what are the best ways to demonstrate IT value, through analytics or metrics up front; through business cases or portfolios; through governance discipline; through agile practice or just through business-IT mutual understanding?

In order to demonstrate IT value, organizations need to first know wherein lies the IT value: If you understand that upfront by doing the right strategic questioning, you can later go back and ask if you achieved the value that had been set out to attain. 
(1) How does IT become strategic? and 
(2) How does IT deliver maximum value? 
The value itself is a multi-dimensional concept, a seamless customer experience, an optimal business service, a commercial value proposition, a social value system which deals with and provides context for varying interest and need. More broadly speaking, IT is about distributing and sharing intelligence on the scale and assisting social and lifestyle and purpose needs, uniformly, fairly and effectively.

In the power of mutual understanding and teamwork, IT can use analytics and metrics as a way of measuring the performance benefits of IT to business: IT and its partnership with business are at a point where past successes can be used to advance future collaborations between the two. The best way to show value to all your colleagues is to produce what the business consumes. The wider business knows IT is useful when projects are delivered successfully, the further business people want to know what value IT can provide to "them." 

Contextually, the measurement method is to persuade management:
(1) to believe measuring the value-adding contributions to the organization as a positive
(2) present a methodology to acquire the “appropriate” contextual measurement items, and 
(3) maintain vigilance. 
Then, it comes analytics and metrics as a way of measuring the performance benefits of IT to business. Once this is done and the business understands the value of IT, IT can expect some sort of partnership with the business, where you have business folks coming up with further ideas on how they can benefit from IT.

The best way to demonstrate the value of IT is to know who you are showing the value toward: Obviously, you are demonstrating the value of IT to business. Looking at it from the point of view of "What's in it for me?" The business would like to know what's in it for them. So the IT needs to first understand what the business is, what their pain points are, identify areas for improvement and then those that can be improved with IT. From the senior leadership perspective, where IT needs to provide a strategic advantage to the business line manager; where IT needs to make the function more productive. The critical point is relationships (and developing a partnership mentality). IT has to demonstrate value ONE AT A TIME with each business manager to be fully appreciated - and that is up to the IT leadership in each company.

CIOs as the business strategist should advocate IT strategic value at the big table and practice governance discipline as well: CIOs and senior IT leaders need a seat at the executive leadership tables to ensure IT strategy, goals/objectives align to the wider organizational strategy and culture, while the front-line IT management partner with the bulkier workforce teams and generate ideas to drive business process improvements and IT solution adoption. IT/business partnership teams fill the CI (continuous improvement) idea funnel and senior leadership teams prioritize and schedule resources for those projects that most closely align to and drive forward the overall strategy of the organization.

Understand the business process to improve business value: The best way IT can demonstrate value to the business is to invest in understanding the business processes it supports and deliver improvements that help the business achieve its goals and objectives, streamline workloads, etc. Studies at the time showed that 80% of those efforts failed. Why? Because business processes were the starting point, instead of strategy and culture of the organization. The strategy tells you what processes you should focus on because they are strategic to the company. It also tells you whether you are redesigning business processes to achieve changes in time, cost, quality or scope. Which of these have you decided on the strategy that is most important to the competitive advantage?  Lastly, the culture tells you how much chance you have to redesign end-to-end processes that cross functional boundaries and impact people's jobs. IT can present value via business cases or portfolios.

Although assessing financial value on some projects is a much more difficult attribution, IT needs to develop a systematic measure approach to assessing its multi-dimensional value beyond just monetary benefit, it is important for management to calculating IT value-added contribution, rather than just pushing the technology out, as IT has to re-brand itself as a value creator and strategic business partner.


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