Whiteboard: How to Measure IT ValueBy Howard Rubin | Posted 05-01-2003
Will that new project cut anyone's costs other than the IT department's? Will upgrading that sales system help improve our margins? What's the payoff of training? CIOs and other executives have struggled for decades to measure the return on their IT investments, in hopes of finding a direct connection between their various systems and such top- and bottom-line benefits as revenues, earnings and cost savings. But except for cost savings within the IT department, IT systems and initiatives don't generate value directly. Instead, they do so by enabling business processes that create value for paying customers or bring in more revenue and save money for the company.
This whiteboard, by Howard A. Rubin, an expert on IT measurement and performance metrics, provides a roadmap that shows how to reveal and measure each part of this value chain, along with two examples that illustrate how it can be done. Applicable to any kind of IT initiative, system or investment, new or ongoing, the whiteboard provides guidelines for measuring the value IT brings to a company, and choosing the metrics to use. It enables executives to show demonstrable value in many forms, not just as a single ROI number, and to monitor operations in terms of value. By using the whiteboard, an IT organization will be in a position to get the most out of its IT investments and assets.
The whiteboard comprises four PDF pages that can be printed out on standard 8.5" X 11" paper.
Howard A. Rubin is an executive vice president and board member of META Group Inc. and a professor emeritus of computer science at Hunter College of the City University of New York. Rubin maintains META Group's worldwide IT benchmarking database (www.metagroup.com), which contains data from 10,000 companies in 50 countries.