IT Investments and Business Value

The debate about the business value of IT investments for any large enterprise can get very religious, and intense. Not surprisingly, these conversations gather strength every time we have a recession. Here is my view on the factors really at work behind this debate on "Business Value of IT Investments"

Economic Downturn - When money was aplenty, and creativity of 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, board is asking the CEO, CEO is asking the CFO, CFO is asking the CIO and CIO is asking his team and his vendors - Are you sure you are giving me enough value for all the dollars that I am spending?
IT within Enterprises has become way too complicated - In the last 30-40 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.
Vendors are guilty of overpromising - Over 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.
Enterprises are not clear about what they want - 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. Lack of clarity on the needs of business and how IT can fulfill them only create noise and destroy the melody.
Communicating the Value - The challenge faced by IT is more of a communication problem than the ability to deliver business value. IT has been so comfortable with their technology world and technology jargons that it has not taken the pains to communicate the value of the IT investments to business and the lack of communication is hurting and haunting them.

We recently surveyed 268 business and IT executives on this subject and the results were telling. While most respondents agreed that IT is critical to business, the perception of IT as being strategic to business differed greatly when the same questions were answered by IT executives versus non IT executives.

About the Author

Anirudh Joshi is General Manager and Head of Change Strategy for the Citi vertical at Wipro Limited. He is an alumnus of IIT Roorkee and has worked in multiple roles in domestic and global IT business in products and services, including an exciting innings as an entrepreneur. He has successfully handled leadership roles in business development, practices, solution architecture and consulting. An entrepreneur at heart, Anirudh is passionate about creating and incubating new services and initiatives, which balance IT efficiency with end user effectiveness.

In his current role, his focus is to drive automation, innovation and solutions in new age areas of Digital, Cloud and Analytics to solve real problems of customers, drive demand and growth and thought leadership for Wipro.

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