The Business Value of IT

I write a blog about the optimization of people and process. I find it amusing how much time each day I spent in front of technology and how I leverage technology so I can "do more with less". I sometimes forget about IT's contribution to my business and the value it brings. IT has enabled my company to reduce costs and even gain a strategic advantage. It's one of those things I take for granted; I do not think about it. I just expect it to be there when I need it.



Today I took a serious look at my processes. In my company’s case, we use search engine optimization techniques and keywords for lead generation. We have out-maneuvered companies that are much larger and have a much bigger pool of resources. We also leverage technology to collaborate with our Indian partners as we discuss how our website will look, feel and what functionality will be included in phase one development. I also leverage technology to talk to my partner in AZ for free. I often hear executives bemoan as they cannot justify, or they find it difficult to quantify the business value of technology; and I am reminded of Robert Solow's comment, "I see computers everywhere except in the productivity statistics".



When I started writing this blog, I defined the term business value as the ways and means a monetary value is assigned and how that aligns to a person, process, activity and yes, even technology; and what it adds the bottom line. Speaking of bottom lines;



BOTTOM LINE It's been 11 year's since Solow's “Productivity Paradox”; but, as technology has become ubiquitous, it is easier to take for granted. Business and technology executives must define a common taxonomy, methodology and metrics to define and measure business value. As global economic realism bears down on the United States, demanding increased productivity, technology improvements and correct product sourcing must be leveraged across the SG&A to compete on a global basis

Business Value and the eye of the beholder.

Imagine a business running perfectly in a perfect world.
Wait; forget the perfect world part for now . . . no two people will imagine the same perfect world anyway.

Let’s concentrate on your perfectly running business. If guests from your real-world company stumbled into your imagination and saw what you created, what would they see?

As a good host, you show them around. Coming from the traditional not-so-perfect place, they’re quite amazed and want to know how you accomplished this fantastic feat.

* Who is responsible?
* Where’s the magic wand?
* How could this be?

There’s got to be a conflict somewhere. Are the conflict teams on vacation this week? Where’s the disruptions? How long can this last? Are all those people actually supporting each other? Who left the lines of communication open?

Who’s in charge? Doesn’t someone need to be micro-managing this place? Where are they? What’s going on over there?

Looks like a pretty important meeting! “Well yes, it is. That’s our transformation team . . . all the teams in the company are represented.”

OK, perfect timing . . . now we’ll see some fireworks. All those innovative ideas . . . sure, they look good on paper . . . wait ‘til they try to make some changes. I hope you’re prepared for the chaos!

A few conflicting processes here, a few integration disasters over there, some technical glitches spread all around . . . yeah, this place will feel just like home.

“Actually they are just celebrating a bit. All the process changes went very well and the entire integration project was completed ahead of schedule. There hasn’t been any slow downs; in fact, we expanded the business, went global, increased production, eliminated some wasteful practices and are running better than ever. We know it will have a very positive impact on the company’s bottom line this coming year. Our CFO is thrilled . . . might even use a personal day; that would be a first!” Whoa!

You’re kidding, right? This isn’t possible!

What did you guys do?

Did you somehow all magically agree to align to the same vision, or something?
“I guess we did. We all agreed that our business is important to us and that the mission of the business serves a vital purpose in the world. We’re glad to be part of it . . . we each know we are having a real impact.”

So, there was some magic, right?

“You can call it magic if you like, but we call it business value; we prioritize our initiatives and align all our activities, functions and processes to optimize our resources. As you can see, it works.”

“It can work for you, too . . . if you are serious about improving your business, I know just the folks to help you get started. All it takes is commitment to your business value and . . . a bit of imagination.”

Gary Mitchell, Co-Editor.

Cruise Control

Written by Gary Mitchell, www.businessvaluemanagement.blogspot.com.

I am not a fan of chain letters and refuse to pass them on, but occasionally one arrives that contains some interesting information that inspires a thought. This morning I received such a letter. It contained a story about a woman who learned the hard way that drivers should NEVER DRIVE IN THE RAIN WITH THE CRUISE CONTROL ON. In fact, NEVER USE THE CRUISE CONTROL WHEN THE PAVEMENT IS WET OR ICY. The highway patrolman at the scene of the accident explained that if the cruise control is on when your car begins to hydro-plane and your tires lose contact with the pavement, your car will accelerate to a higher rate of speed, making the car take off like an airplane. The driver loses control.

How does this apply to business? Is there a lesson here? How many businesses operate on cruise control? Each of them starts out with a vision of where they want to go and a mission to drive them there. Yet, somewhere along the road to success, leadership gets the bright idea that the business can operate on cruise control. They set the mechanics in motion, relax, and sit back to enjoy the ride, mistakenly thinking that they are still driving because they are holding a steering wheel. However, a steering wheel does not a driver make.

Now, I am not saying that cruise control is necessarily a bad thing. In fact, cruise control can be a wonderful feature to use when driving efficiency, but there are conditions. NEVER OPERATE YOUR BUSINESS WITH THE CRUISE CONTROL ON UNLESS THE CONDITIONS ARE RIGHT. If control is being turned over to other people, other functional areas, other processes, how do you know that the vision is just as clear to them as it was to you when you started? How do you know that their mission is in line with yours? How certain can you be about the course of your business? How certain can you be about reaching your desired destination if key values are out of place, out of sync, out of control? What if the business loses contact with the road, with the guiding principles that formed the foundation of your business in the first place? What if the vision has become distorted and the mission out of alignment?

What has been done to make sure conditions are right for optimizing the operation of a cruise control system, or any system for that matter? There will always be risks that are out of our control and may catch us by surprise. But, especially in business, the business drivers need to be aligned for top performance. Managing for top performance requires serious attention all the time.

Bottom Line: Heed the warnings. Assess the situation. Assess it again. Identify the present conditions. Check the alignment. Are all the drivers in line with the vision and mission ahead? Are all the activities, functions, and processes working efficiently together? Proceed with caution when setting any cruise control options. The well-being of your business is at stake.

Who, what, when, where, why, how?

I heard from a colleague who asked, “What if you cannot derive business value from a client because he is reluctant to talk about his issues openly?” The answer takes me back to my 5th grade class where Sr. Jean Marie taught us the following conversational secrets:

Who? Explain the profile of your existing client base. Talk about results and deliverables and how companies have benefited from your solution. Don’t lead the client down one path; instead, talk about the diversity of the value received. Don’t talk specifics about any one client; but speak about clients in general who have experienced broad impact on business results. If they ask what one of your clients is doing, say, “That is important, and if appropriate, at the right time we may be able to get you to speak to that client about the benefits he received from our company.” You don’t want to give the impression that, if they become a client, they will be used in some sales pitch.

What? What is the perceived value that you see for the client? It is important to do your homework. Listen to the last few quarterly earnings reports; tie your solution to the CEO’s vision, mission statement, guiding principles and business issues.

When? “When” is a tricky, but an important aspect of early conversation with a prospect. It can also set you apart from most other salespeople. Every salesperson I know prepares in detail for meetings with executives, but few talk about the work they put into preparation for the meeting. “When” can take the following tact, “When I was preparing for this call I learned a few things about your company.” Tell them a few points you learned in your preparation, “Margins are down”, “Inventory is up”; whatever the facts are, tell them what you know. They will appreciate the fact that your have done your homework.

Where? Explain in general terms where have you done it before; where in the business cycle can they expect to see results? Be careful that you do not tread on the unique value that you offer to other clients; just because their main competitor is your client does not mean that they need the same issue solved. Explain where you provided unique value that gave your client a unique benefit. They invited you to a meeting to hear what you can offer them, not what you delivered to another company. Your reputation or client base may have gotten you in the door; the unique business value you offer may get the dance.

How? Explain how results are articulated and how you have helped other companies with business issues. Explain the lifecycle of an implementation, how it impacts the business and how it can be rolled out to capture low hanging benefits first.

Why? Why did they accept this meeting? Why do they see a requirement? Why is your differentiator important to them? Why you, your product and your company? They saw or heard something that they think can be a benefit. It is important to discover why they accepted the meeting and why they think that your product or service can benefit them. Get them to talk about what they see as the solution and why they think you can add value to the process.


Bottom Line ; What we say and how we say it can make or break the relationship with our clients. Who, what, when, where, why and how questions get your client talking and you listening. Don’t open your mouth and pop in the spec sheet or product of the week. A good salesperson is a good listener. A great salesperson asks great questions and triangulates answers into a solution that ties unique value to business benefit for the client.

2008- the intersection of business process and IT.

I was looking for a way to articulate the benefit of Business Value Management. In my career in account management, a common theme that rises to the top at my clients is there has always been islands of information and stand alone processes. It amazes me that CFO's are marching down one route, looking at processes, while CIO's staff are always looking for the next great piece of software or hardware that delivers some unique business value. With enterprise ERP provider's now offering, though acquisition, "full suite" applications, it is time for CIO's and CFO's to sit at the table to uncover and define one version of the truth. A common vision, goal, taxonomy and methodology must be agreed upon before the journey begins. Lean/Six Sigma, Agile, TCO etc. will only "polish the apple. If the core is broken, those processes must be identified and road mapped for remediation.

My career in market research with my clients being both the CFO's office, at Hackett and the CIO and his staff, at Gartner tells me that they are on a journey with two distinct talk tracks in regards to how they define of business value. The good news is, the unification of business and technology has begun, and it is the IT providers who now talk about the business value of their services and products.

2008 will be the intersection of IT and business process at the function level and will we will start to see a emphasis defining business value at the process and activity level.