It suddenly seems to be the flavor of the day. Everyone is talking about “how does IT add value to business”.
It is not as if IT was not adding value earlier so I wonder what is behind this heightened sensitivity towards “adding value or delivering value from IT”.
Some top of the mind factors as I see them –
a) Economic Downturn – When money was aplenty, and creativity of the IT world was at its peak, budgets were generous and freedom to IT significant. Now the situation is grim, the market is tanking, shareholders are questioning the board, the board is asking the CEO, the CEO is asking CFO, the CFO is asking CIO and CIO is asking his team and vendors – Are you adding value to my business for all the dollars that I am spending ?
b) IT within Enterprises has become way too complicated – In the last 40 years, IT has become increasingly complicated with multiple vendors and standards. The mortality rate of vendors has increased the complexity. Interoperability of various systems is a key problem and integration which was thought of as a solution often leads to more problems if it is not thought through well. This complexity is coming in the way of business getting the ROI on the dollars it spends on IT.
c) Vendors are guilty of overpromising – In the last few decades, the best of global talent gravitated towards IT and Finance. The share of this talent which went in marketing also went over the top in promising what IT can deliver. IT can solve some of the problems and can help in many areas but it cannot fix everything. Enterprises that spend a huge amount on costly products and services often discover to their dismay that they have not got what they thought they will and the gap in expectations continues to be significant. The lock-in models (both technology and business models) practiced by most vendors only increases the complexity.
d) Business and IT talk a different language - If IT has to deliver value to business on a consistent basis, business, finance, CIO, and vendors (products and services) have to be in harmony and sing the same song. Enterprises need to align the IT strategy to business strategy and articulate clearly their expectations from the technologies they choose to implement. Business leaders (CXOs/CFO) use a vocabulary of revenues, profits, time to market and similar metrics. IT leaders use the language of Apps, Infra, downtime, uptime, availability, scalability, servers, storage, MIPS, virtualization, cloud. The problem is less of delivering value but more of communicating the value delivered. And the onus lies squarely on IT, because it has its back to the wall today.
However, the fact remains that IT has the rare positioning of being both an infrastructure lever and a transformational lever.
Given this interesting position, the onus is on IT to show clear and consistent value to business, both in terms of keep-the-lights-on work, and at the transformational, game changing level…
So how do we define business value of IT, and communicate it to business?
More on this in the next post…