Anticlue

IT Value

While once again attempting to catch up on list serve emails the other day I noticed a thread on project management systems and tools. Surprisingly most conversations were about not having a tool. However Kay mentioned the issue of building a system quickly several years ago and never getting around to improving it.

This made me smile, because we have been in the exact situation for a while. This also amazing to me on how IT organizations can be in this place. We preach about having a centralized integrated system, a tool that assists with workflow, and a way to monitor the departments productivity. In the corporate world, you would hear the business department head voicing concerns if a department was comprised of 10-12 disparate systems, with duplicate data entry. However if this is the case in the IT world, this is a different story. I think a lot of organizations just don’t have the time or resources to expand in developing an IT workflow system. So we end up using several tools with different levels of information, attempting to centralize, but as management changes we get more stop gap measures. So we arrive at a place where it is hard to measure the value of IT. The end result can leave IT being perceived as the only mission critical department that can be totally outsourced.

Organizations are striving for a centralized area for measuring IT relevance, the Canada Management Accounting and the American Institute of Certified Public Accounts have released the IT Contribution Model as a way to evaluate and measure IT performance. The guide line is below.

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In a new CMA Canada Management Accounting Guideline, jointly produced with the American Institute of Certified Public Accountants (AICPA), “Evaluating Performance in Information Technology,” we have developed a tool for identifying and measuring the value of IT initiatives. We provide a model and a selection of measures for evaluating performance in information technology in both for-profit and not-for-profit organizations so that CIOs can better justify and evaluate their initiatives, and CEOs and CFOs can make better resource allocation decisions. The IT Contribution Model for evaluating performance in information technology is a general model of key factors that helps organizations identify and measure the costs and benefits of IT and properly assess the payoffs of investments in IT. Specifically, the guideline includes the following:

• It describes the key factors for organizational success in IT integration that relate to the critical inputs and processes that lead to success in IT outputs and ultimately to overall organizational success (outcome).


• It outlines the specific drivers of IT success based on inputs, processes, outputs, and outcomes, and identifies the causal relationships between the drivers.


• It provides the specific measures of IT performance to track performance of IT initiatives along the four dimensions outlined above. The metrics can be used for both IT project justification prior to implementation (planning) as well as for evaluation after completion (performance measurement).


• Since many organizations have little experience assigning monetary values to IT outputs and the measurement of IT payoffs, the guideline provides examples of how to assign monetary values to non-financial IT outputs (benefits).

It is interesting to see an attempt to measure the value of IT through a different set of eyes.

Another way to display the value of IT has come from Information Management. This is a corporate wide dashboard with requests, priorities, resourcing, schedules, and statuses. It allows an organization to see the breath of projects using resources for an organization. Hopefully this model will also bring to life concurrent and conflicting IT priorities. A tool like this needs to capture everything a person does, because it will be enlightening to the organization. They will see inefficiencies with high level operational and maintenance costs. The organization may even see seemingly redundant projects in the requested queue. The other overlap that does occur on an enterprise view is an overlap in products used for example one department may be doing reporting with Crystal Enterprise, another department doing reporting with Cognos. Or one guy is doing all java based development, while others are still working with the antiquated VB6.

The buzzwords for these findings are:

• Project portfolio management (PPM) a consolidated view of the project pipeline that allows IT to kill redundant projects and select projects with the strongest payoff.


• Application portfolio management (APM) provided companies with efficiency gains through reduced operational and maintenance costs.


• Enterprise infrastructure management (EIM) helped companies discover overlaps in products used to manage different infrastructure domains.

So with all these ways to measure why isn't there a standardized tool?