Expensive Habit

Business engagement is, after all, the one and only way to ensure business value, says John Thorp, vice president in the Strategic Consulting Practice at Fujitsu Consulting in Canada and author of The Information Paradox (revised 2003).

Thorp's book asks whether IT investment is a competitive "must" or just an expensive corporate habit yielding little return. He argues that without a proven approach, which drives business value out of investments in new technologies, e-commerce, new software packages or anything else are merely a gamble - and often a wildly risky one at that. "The fundamental missing link is that we've focused on technology, not the business outcomes and the associated change," Thorp says.

To help executives make better informed decisions about IT investments and to achieve anticipated ROI, Thorp outlines an "enterprise value management" approach, combining "benefits realization" and "portfolio management", as the way to secure IT value. Enterprise value management, he says, is a value-driven strategy process that identifies a dynamic, "sense and respond" strategic governance system to help organizations identify the right projects, and to manage what is, in most cases, "an uncertain journey to an uncertain destination".

Thorp told CIO the revised version of his book in particular responds to a clear need, still widely evident today, for organizations to develop much greater rigour around the linking of business strategy to projects.

"When you actually start planning your projects you find out that business strategy isn't in very good shape, so [the approach] is really about starting to push that much more onto the business," he says. "It's saying you really need put some more thinking into business strategy than: 'We need to improve customer satisfaction'. What does that mean?

"The original book basically said there is bunch of missing links: that one of the real challenges is that we continue in project management to largely focus on delivering the technology and then assume that once you've done that everything will work. In fact, although there may be some technology projects that are simply technology projects, in reality they are mostly business change programs. And one of the foundations of the book said we are really not investing in technology, we're investing in IT-enabled change, and therefore you need to manage that program of change of which technology is one part."

Achieving change relies on having every stakeholder understand the implications for them and getting them to buy into that change, and it means managing the change. It means understanding that whether the issue is putting in customer relationship management, supply change management, enterprise resource planning packages or business intelligence, the enabling technology is only a very small piece of what it will take to achieve value, Thorp says.