Information technology strategy touches every aspect of a company’s business, but it’s only recently that boards have begun to make IT strategy a major priority.
Companies are making IT investments that are strategic in nature in that they enable new business strategies. They are also significant enough in terms of the dollars involved that if the investment fails, it can be material to the income statement of the company.
IT is so central to the strategy of many companies that if major IT investments fail they also have a significant impact on corporate performance. Measuring value from IT is without question one of the most difficult areas we’ve looked at, and one of the most challenging for companies.
In many cases, executive management struggles to effectively measure value from IT. Not to detect value from IT, but to measure it and convey the measurement of that value to the board.
What are the critical success factors to drive meaningful value from IT assets?
Years ago this would have been an easy question to answer; meet processing deadlines and ensure databases were available. Now, with the environment squeezing every penny from all aspects of business support this has become a science unto itself. Companies have long struggled to keep up with the expectations of business departments. As IT expenditure comes under closer scrutiny, more and more questions are being asked about the ability of IT to deliver strategic value to the business. A great many of the issues which prevent IT from delivering strategic value spring from the short-sighted approach to past IT investments. Project justifications are often focused on the short-term potential upside of implementing a tightly defined ‘stovepipe’ solution, ignoring the potential long-term downside of doing so. However, there are now reasons for optimism for two main reasons. First, technology standards have matured enough to make it easier to not only connect stovepipes together but also to redesign them in a more cohesive manner. Secondly, and more importantly, mindsets have evolved on both sides of the divide (business and IT sides), acknowledging that a more collaborative and long-sighted approach to system design is required. An enterprise architecture practice takes advantage of the maturation at both technology and mindset levels. We have developed an enterprise architecture framework to help your enterprise architecture practice. This framework maps business needs with technologies, using a well-defined model of software and systems infrastructure. Key areas that must be addressed by an organization are:
Enterprise architecture matters
Adoption of a systems perspective on enterprise architecture
Managing change is key (ITIL is becoming very critical)
The alignment of business and IT is the top priority
Enterprise architecture practice drives IT value
Enterprise architecture practice handles supplier consolidation
Enterprise architecture practice delivers true service provision
Process management models are critical