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.