How does IT add Value to Business?……what is behind the question?
It suddenly seems to be the flavour of the day. Everyone is talking about “ how does IT add value to business”.
It is not as if IT was not adding value earlier so I wonder what is behind this heightened sensitivity towards “adding value”.
Some top of the mind factors as I see them –
a) 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 CFO, CFO is asking CIO and CIO is asking his team and his vendors – Are you sure you are adding value to my business for all the dollars that I am spending ?
b) IT within Enterprises has become way too complicated – In the last 30 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.
c) Vendors are guilty of overpromising – In the last 30 years, 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 who spend a huge amount on costly products and servics, often discover to their dismay that they have not got what they thought they will and the gap in expectations continues to be signficant. The lock-in models (both techology and business models) practiced by most vendors only increases the complexity.
d) Enterprises 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.
If enterprises do not do their job , the talk of adding value to business will become like a husband asking his wife – fine you take good care of our house and our kids, and you ensure the food is on the table when I am home, but how can you help double my salary at work?
It is not impossible, but it is not realistic and not a necessary condition.
Having said this, the fact remains that IT has the rare positioning of being both an infrastruture lever and a transformational lever. Given this interesting position, IT does have an onus to show clear and consistent value to business, both in terms of keep-the-lights-on work, and transformational, game changing level…
In the Next post, will attempt to answer the question,