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The Elusive Business Value of IT
Every enterprise has a legacy of investments in IT that has created the current IT environment — hardware platforms, operating systems, networks, a portfolio of business applications — that touch almost everyone in the enterprise, and many outside the enterprise.
Many enterprises spend $5,000 to $10,000 per employee on IT. When aggregated into a single cost center, that amounts to many millions of dollars — often 3 percent to 5 percent of revenue.
Why do enterprises spend so much on IT? This is a question that few business or IT managers seem to be able to answer. IT costs are often shrugged off as part of the cost of doing business — a necessary overhead. The only serious questioning comes up when the next IT project is submitted for approval — and every manager knows the challenges of creating what looks like a reasonable business case.
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Justifying IT investments is moving from art to science as executives look for business cases they can understand and embrace. The total value of opportunity approach uses the traditional language of business.
1 August 2002 |
Audrey Apfel |
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IT's contribution to the success of an enterprise is not always clear. These case histories highlight the relevance — spanning from zero percent to 100 percent — IT can have in reaching business goals.
17 July 2002 |
Angelo Panarella |
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Risk is a necessary ingredient for success, so a realistic assessment of IT investment risk is a necessary ingredient for IT investment success.
16 July 2002 |
Nick Jones |
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Business and IT are strategically focusing on external agility to generate competitive advantage and real-time enterprise organizations. Enterprise and IS leaders must shift resources and strategy now.
17 July 2002 |
John Mahoney |
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Few enterprises are clear leaders in the use of IT. Smart followers gain some benefits; the majority just use IT as a survival tool, which only benefits IT vendors' balance sheets.
18 July 2002 |
Paolo Magrassi |
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AXA, needing to apply more rigor in selecting IT investments, established a governance approach that used a formal business case, prioritization by business strategic objectives and dynamic IT resource allocation.
24 July 2002 |
Bill Rosser |
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In the past, the purpose of IT investment may have been to improve administrative efficiency. In the future, it will increasingly be to improve knowledge worker productivity.
25 July 2002 |
Andy Kyte |
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