How do you determine the real business value of IT ?
What’s all the fuss about intangible assets and intellectual capital ?
What effect does business value and IT really have on the global economy ?
Business Value and IT Investments
Understanding the real business value created from IT investments requires the introduction of business-relevant measurement approaches, unravelling the chaos around intangible assets and the development of a global economic context for IT (Information Technology).
The real business value of IT
So many questions are swirling around the world of IT today relating to the
“real business value of IT.” Between 2003 and 2005, Internet investments in major global
corporations, government agencies and businesses will be in the trillion dollar range,
according to leading independent IT industry reports and government surveys.
To have a complete view of the value creation as related to Internet and IT investments,
these three overarching questions must initially be addressed:
How do you determine the real business value of IT ?
What’s all the fuss about intangible assets and intellectual capital ?
What effect does business value and IT really have on the global economy ?
Start by the beginning
In order to carefully address these three important questions, consider this one:
What is the business value of IT and why has it been so elusive ?
IT exists solely to deliver real business value to the enterprise. Yet, for many managers and enterprises, that value is elusive. In today's cost-conscious and cynical world, demonstrating the value of IT is imperative. 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.
As one cynical CEO said, "I think I’m probably getting a return on investment on about half of my IT investments, but I'm not sure which half." There are many war stories (although only the real disasters ever see the light of day outside the enterprise) of IT projects that are delivered late or over budget; or that fail to deliver the promised functionality or are implemented in a change-resistant climate. The response of some CEOs: "We don’t have IT projects, only business projects, so the responsibility for the value that IT delivers is a business unit responsibility."
The real business value of IT comes from efficient business processes
The business value of IT comes from the ability to conduct business processes more
reliably, faster and at lower cost, and to control inventories, increase revenue,
reduce time to market, improve customer service and rapidly provide information that
enables better decisions. The only way to achieve this is to deal with a solid, reputable
Internet development firm that has been in business long enough and has ample experience
in delivering real business value.
However, once any new initiative is implemented, the value becomes embedded in the process, and unless pre- and post-implementation metrics are clearly defined, it becomes impossible to measure and report the value of a new application.
What remains apparent are the ongoing support costs. Justifying IT investments is slowly moving from an art to a science as business and finance executives look for business cases that they can understand and embrace.
Deal with a solid, reputable Internet development firm
Since 1996, the General Center for
Internet Services Inc. (GCIS) has consistently delivered real business value to all its
customers, on budget, and on time. GCIS has vast experience in Internet application
development, e-commerce business processes, secure Web development, Internet security,
site hosting and related services. GCIS is your complete Center in true business value
in Internet services and related IT solutions. We will be pleased in carefully
reviewing all your important business aspects and to deliver maximum business value
for all of your organization.
Contact us today.
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