Tips for Assessing and Communicating the Value of IT

CIOs today are responsible for developing and defending the IT budget and proving the value of IT to business executives, but that isn't an easy task. These tips, drawn from more than 25 years of IT experience, will make your IT projects more successful as well as eliminating the burden of defending IT initiatives.

PLM Software Implementation

Current Approach
The IT leader completes the capital expenditure request for the software implementation, defends the IT investment needed, and explains how it will support the business goal of reducing product variances by 25 percent.

Strategic (New) Approach
The VP of engineering, who is responsible for new product development globally, has a business goal of "reducing product variances by 25 percent." The VP completes the capital expenditure request, integrating the IT component (for example, in this case, Product Lifecycle Management software), and defends the overall investment required to achieve the business goal, rather than each spend line item.

Key revelations of the recommended approach:

• The burden of defending IT initiatives as standalone project is eliminated; instead the business leader adopts the IT project as a core enabler of the business strategy. This imparts instant credibility as the business sponsor justifies why the company needs to invest dollars in an IT project.



• IT projects will likely experience higher success since the business and IT have completely aligned objectives and purpose. Aligned people, process and technology is a winning recipe. (Also read 5 Tips on IT Alignment That Can Generate Profit.)

How big is the task of transitioning to this high-impact approach?

1. Active membership at the executive table is a prerequisite.
You should jump into the driver seat to help businesses shape their strategies. Recommend ideas where technology can change the way the business is done. Take the time to educate fellow functional executives about new technologies and share information on industry best practices. Provide real examples of companies that have benefited from such new technologies. Avoid falling into the trap of using acronyms and IT jargon; instead focus on specific business issues that could be leveraged by technology or IT applications — reducing time to market, improving the bottom line through cost reduction, expanding market share, or enhancing competitiveness.

A good example of this is at Procter & Gamble, where the CIO, Filippo Passerini, convinced the business to leverage RFID technology to solve the problem of not having posters and product displays at the right place at the right time during new product introductions.

Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

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