In search of the meaning of value

How to realise business value from IT is a question being asked with great frequency. But what is meant by the term value, how is it communicated between IT and other business units within the organisation and how can business performance be improved?

In a three part series Duncan Ellis, analyst at Giga Research, Forrester Research Inc, will deliver pragmatic advice regarding the key principles to achieve business value from investments in IT.

Written as a story, Ellis looks at the dilemmas, challenges and solutions experienced by an IT project manager - John - in his quest to deliver value to the business through a Customer Portal project. The next installment will be in our value report on 2 October.

John is a worried project manager. It's nothing to do with the project he's completing.

In fact he's just been given a pat on the back by his boss for coming in on time and on budget.

The thing that's got him concerned is the customer portal initiative he's been asked to head up as his next assignment, for the mid-sized manufacturing company he's been with for three years now.

To be more specific, what's got him worried is the 'business value' he is being expected to deliver on this new project.

Just the sort of 'opportunity' he needed dumping on him at the end of a long day.

What is business value anyway? The business course he'd put in last years' training plan would have been useful.

But that was 'for the birds' after the training budget was slashed.

Should he ignore this 'value' and concentrate on delivering, once again, on time, on budget and on scope.

But, he has a nagging feeling that there's something important about value.

Perhaps, he thinks, he should see the IT Director to get help. She's got her MBA certificate framed on her wall. At least she meets regularly with the rest of the business at the operating committee.

But it takes a week to get into her diary. A search for 'business value' on Google just brings back a lot of people trying to sell him something. Thinking of the customer portal project he's been asked to lead, he searches for 'instant portal.'

Bingo! There's a 'just add Java' instant portal and even a 'just add water' version. The site offers 100 white papers on portals.

As it loads, he looks at a company email announcing the launch of a 'balanced scorecard' project.

'Off the back of the company strategy project, all managers will be involved in this project to set departmental level performance metrics'.

John remembers a friend, who works in an IT shop for one of the major airlines, telling him about a performance metrics project. That actually helped their IT group identify the really 'business critical' projects.

The Powerpoint summary of the strategy project attached to the email reveals that management wants to double profit margins and add 10 per cent to revenues.

The rumour is, they are keen to be acquired. John needs to meet with Toni, the marketing director, about the customer portal before the end of the week.

He finds the 2003/4 Operating Plan at the end of the Powerpoint. Toni is accountable for three of the 3/4 goals: reducing costs to serve for 'small' customers, increasing retention of all customers and identifying 15 winnable major accounts.

This really might help him with the business value of customer portalsproject.

Feeling a little happier, John decides to call it a night, replaces the portal white papers in his briefcase with a printout of the operating plan and powers off his PC.

'In for a penny, in for a pound' he thinks passing the IT Directors' visitor waiting area and picking up a copy of the company annual report from the coffee table.

Will this reading material help John prepare for a successful meeting withToni? Does John know she's still smarting from having the internet serverstaken from her control? To be continued...

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