Tuesday, August 4, 2009

Businesses failing to capture IT value

In this recent NBR article, which refers to a survey by ISACA and quotes John Thorp, one can identify at least five key issues that are preventing organizations from realizing value from their information system (IS) and information technology (IT) investments:
  • The failure to establish a shared understanding of what constitutes value across the enterprise.
  • The failure to focus on and measure the realization of benefits.
  • The failure of business stakeholders to own the realization and measurement of benefits, and assign appropriate accountability for the changes needed to realize the benefits.
  • The failure to adopt effective value delivery practices, such as Val IT, to manage IT-enabled investments as a portfolio of investments, to include the full scope of activities required to achieve business value, and to manage investments through their full economic life-cycle.
  • The failure of boards and CEOs to accept accountability for the performance of their value delivery practices.
Organizations that persist with current value delivery practices cannot reasonably expect to achieve value from their IT-enabled investments, except by chance. In fact, they would problably do better if they gambled the investment in a casino! (A Cranfield Univerity study of the IS investment processes of large companies found that just 27% of projects delivered the benefits that justified the investment. This statistic has remained largely unchanged in 30 years despite the advancements in technology and IT professional practices - the things that IT can control.)

Introducing effective value management requires commitment to a change in behaviour and it is needed from the very top. John Thorp has more to say about this in his blog, Managing Change - The key to Delivering Value: "Individual board members and executives are being asked to change their behaviour – behaviour that they may feel has served them well in the past."
"It is difficult to get a man to understand something when his salary depends upon his not understanding it." - Upton Beall Sinclair, Jr. American novelist and polemicist, 1878-1968

No comments: