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

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.

Articulating the business value of IT.

With the plethora of messaging hitting functional process leads from outside the organization, internal providers of IT must develop a strategy to articulate their benefits to their organization. Many of the principles and ideas used in marketing and advertising are adaptable to build a enterprise brand for IT.

Brand development takes into consideration 3 key factors, differentiation, relevancy and consistency. Differentiation allows you to separate, distinguish and defend your services against messaging that is coming into your organization from outside service providers. Relevancy keeps you attuned to what users want and need and at the same time keeps you aware of market trends, and Consistency will give your constituents the guarantee or service level that your offering is competitive, at the very least, superior ideally, in addressing and aligning to their business goals. Today your brand is established by past encounters and service features that have already been delivered. In most cases, some re-branding work needs to be accomplished and should be re-evaluated continually. This is not a bookshelf exercise and should be a living and breathing document that should be evaluated in real time.

The first step in building your brand is an identification of key stakeholders with the intent of getting the understanding of their perception on how they think IT as a service is delivered. Do they see IT as a strategic partner who continually creates new benefits or a roadblock that continues down the same old way without alignment to business strategy? Branding of IT must be aligned to the corporate strategy and corporate goals. It must also reach down into the SG&A functionality and be tied to the activity level if individual contributors with in each department. Every person in every department must have an understanding of how IT adds value to their daily activity. An IT brand will build strength over time, consciously or unconsciously your constituents are branding you. A formal branding approach will put IT in the drivers seat.