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Managing IT for Business Value

November 17, 2008

In this blog, I use the phrase IT Business Value to mean the business value contributions driven by IT investments. I intend to extend the definition of business value beyond productivity and to address how to quantify business value, choose the best IT investments, build an IT capability for delivering a sustainable competitive advantage, and manage for optimal IT business value.

Managing IT for Business Value introduces a number of important frameworks for managing and deploying IT. These frameworks are based on ongoing academic research and best practices in the field. It is hoped that the frameworks and case studies I present will equip IT organizations and business managers alike with the insight and tools required to optimize the business value of IT and deliver sustainable competitive advantage. The book makes sense of common acronyms such as TCO, ROI and emerging concepts such as BVI, TVO, TCC and explains what really matters in IT investment decision making.

In addition, I will discuss how to deploy IT, not on an occasional, opportunistic basis, but in a systematic way that delivers an ongoing stream of accumulating value to the business. The systematic approach uses a portfolio management model and requires a mindset of consistently defining, designing, implementing, and measuring IT in business value terms.

One of my key recommendations is that IT managers use both the language of the business and appropriate business practices when managing IT for business value. For example, my favorite air carrier Delta Technology has adopted the terminology of air carrier practices when discussing their computing infrastructure with Delta Air Lines. Several conglomerates companies are using an IT portfolio management approach developed by their colleagues in the operations side of the business. Also, at ServiceXen , we have implemented some of the techniques and methods developed to run our factories to run our IT utility.

The strategies and methodologies described in this blog draw upon a combination of the best academic research and the best-known practices at ServiceXen and other firms. They address the trouble the IT industry today with respect to understanding and measuring IT’s business value.

Enterprises typically lack both methodologies and discipline when analyzing potential and actual benefits delivered from IT. The Internet boom and its attendant increases in IT investment particularly accentuated this phenomenon. Now that economic realism has returned, and IT investment must compete with other types of capital investments, it is imperative that IT organizations improve both their investment decision making and the way their IT investments are managed.

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