information technology adds value

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Of course IT adds value! Everyone knows that. But CIOs resolutely refuse to prove value. I've NEVER seen a benefits realisation plan implemented - if you have one that succeeded, let me know, they're rare things. Many CFOs insist on proven ROI for their business cases - which is so narrow that I suspect something else is afoot here.Maybe they don't trust IT? They certainly won't make free with their funds. This presentation covers the five major types of value that IT adds (whether it wants to or not). It is just a question of doing a little value mining. Show value not PowerPoint slides!

TRANSCRIPT

  • 1. CXO AdvisorAdvise Innovate ChangeExtracting value from ITTerry Whiteterryw@cxo-advisor.co.za
  • 2. Who says IT doesnt add value
  • 3. Who says IT doesnt add valueMostly CFOs (Have a look at the many discussions by CFOs on IT value)
  • 4. Who says IT doesnt add valueMostly CFOsThats because IT doesnt prove hard number value
  • 5. Who says IT doesnt add valueMostly CFOsThats because IT doesnt prove hard number valueAnd ROI is a really narrow way of describing IT value anyway So how do we describe IT value in a way that makes sense to CFOs?
  • 6. Who says IT doesnt add valueBut lets not take it out on CFOs (they dont know better)
  • 7. Who says IT doesnt add valueBut lets not take it out on CFOs (they dont know better)CIOs also say IT doesnt add value
  • 8. Who says IT doesnt add valueBut lets not take it out on CFOs (they dont know better)CIOs also say IT doesnt add value Im talking at a conference for CIOs in London in May, and one of the agendaitems is: Does IT add value and what can we do about it?
  • 9. Who says IT doesnt add valueBut lets not take it out on CFOs (they dont know better)CIOs also say IT doesnt add value Im talking at a conference for CIOs in London in May, and one of the agendaitems is: Does IT add value and what can we do about it?Can you see that the topic assumes that ITdoesnt add value?
  • 10. Who says IT doesnt add valueBut lets not take it out on CFOs (they dont know better)CIOs also say IT doesnt add value Im talking at a conference for CIOs in London in May, and one of the agendaitems is: Does IT add value and what can we do about it? Last year I was at the same conference and one of the agenda items was:
  • 11. Who says IT doesnt add valueBut lets not take it out on CFOs (they dont know better)CIOs also say IT doesnt add value Im talking at a conference for CIOs in London in May, and one of the agendaitems is: Where does IT add value and what can we do about it? Last year I was at the same conference and one of the agenda items was: You guessed it.
  • 12. Who says IT doesnt add valueCIOs also say IT doesnt add value, by their resolute failure to actuallyprove benefits
  • 13. Who says IT doesnt add valueCIOs also say IT doesnt add value, by their resolute failure to actuallyprove benefitsSo the equation looks like this:Spend $1 million on an IT project based on a business case that says thereturn will be $2 million
  • 14. Who says IT doesnt add valueCIOs also say IT doesnt add value, by their resolute failure to actuallyprove benefitsSo the equation looks like this:Spend $1 million on an IT project based on a business case that says thereturn will be $2 millionThen ignore the business case
  • 15. Who says IT doesnt add valueCIOs also say IT doesnt add value, by their resolute failure to actuallyprove benefitsSo the equation looks like this:Spend $1 million on an IT project based on a business case that says thereturn will be $2 millionThen ignore the business case Dont develop a benefits realisation plan Dont try to track benefits Just get on with the next project (Its a business problem anyway)
  • 16. Who says IT doesnt add valueCIOs also say IT doesnt add value, by their resolute failure to actuallyprove benefitsSo the equation looks like this:Spend $1 million on an IT project based on a business case that says thereturn will be $2 millionThen ignore the business caseDont develop a benefits realisation planDont try to track benefitsJust get on with the next project (Its a business problem anyway)And forevermore talk about the cost of running IT.Never talk about benefits
  • 17. Who says IT doesnt add valueCIOs also say IT doesnt add value, by their resolute failure to actuallyprove benefitsSo the equation looks like this:Spend $1 million on an IT project based on a business case that says thereturn will be $2 millionThen ignore the business caseDont develop a benefits realisation planDont try to track benefitsJust get on with the next project (Its a business problem anyway)Oh yes. Ask for more money from the CFO
  • 18. Of course IT does provide valueBut the secret sauce is
  • 19. Of course IT does provide valueBut the secret sauce isThe way you describe value
  • 20. Definition of valueValue (n): The relative worth, merit, or importance of something
  • 21. Definition of valueValue (n): The relative worth, merit, or importance of somethingValue must be describedrelative to something
  • 22. Definition of valueValue (n): The relative worth, merit, or importance of somethingValue must be describedrelative to somethingValue must have merit(something justifiable)
  • 23. Definition of valueValue (n): The relative worth, merit, or importance of somethingValue must be describedrelative to somethingValue must have merit(something justifiable)Value must be important tothe business
  • 24. Definition of valueValue (n): The relative worth, merit, or importance of somethingSo IT value should be described in terms of: What it compares to (not having it; doing it manually, customer retention) What justifies it (keep the business running; improve the business, newbusiness) Why it is important (99.99% SLA compliance isnt important to the business(relatively). Business results are important)
  • 25. There are five types of IT value that fit these criteriaAnd only one adds value
  • 26. There are five types of IT value that fit these criteriaThink about what IT does for the business:
  • 27. There are five types of IT value that fit these criteriaThink about what IT does for the business:Supports existing businessoperations
  • 28. There are five types of IT value that fit these criteriaThink about what IT does for the business:Supports existing businessoperationsFixes things when they break
  • 29. There are five types of IT value that fit these criteriaThink about what IT does for the business:Supports existing businessoperationsFixes things when they breakServices the IT engine thatsupports the business
  • 30. There are five types of IT value that fit these criteriaThink about what IT does for the business:Supports existing businessoperationsFixes things when they breakServices the IT engine thatsupports the businessHelps the business improvetheir operations
  • 31. There are five types of IT value that fit these criteriaThink about what IT does for the business:Supports existing businessoperationsFixes things when they breakServices the IT engine thatsupports the businessHelps the business improvetheir operationsProvides new IT supportedproducts, markets, channels
  • 32. There are five types of IT value that fit these criteriaAnd IT value works the same way:Supports existing businessoperationsFixes things when they breakServices the IT engine thatsupports the businessThe added value that IT can help the business getfrom current operationsProvides new IT supportedproducts, markets, channelsThe value inherent in the systems that we provideThe value of continuityThe value of sustainability (well still be viablenext year)Helps the business improvetheir operationsThe value that IT can create for the business
  • 33. There are five types of IT value that fit these criteriaAnd IT value works the same way:Supports existing businessoperationsFixes things when they breakServices the IT engine th