Measuring the Business Value of Information Technology

posted by David Sward on October 09, 2006

Getting people to measure the business value of information technology is not easy; it is even harder in a high tech company. My name is David Sward and I’ve made measuring the return on investment (ROI) of IT my mission; I even wrote a book about it. It is critical for IT organizations to understand and document the business value they deliver to the company if you want to be seen as anything other than a cost center.

I don’t just mean cost reduction, I’m talking about really understanding the bottom-line impact your IT organization delivers to your customers and putting it in their language. I worked with some very talented folks to validate this by building tools, techniques, and processes for Intel’s IT organization to measure the business value we deliver to Intel.

I’m a human factors engineer (HFE); I’ve established and managed cross-disciplinary groups that apply human-centered principles to the design and development of products and services. I’m also and Adjunct Faculty member at Arizona State University Polytechnic and teach classes on Human Factors Engineering and Human-Computer Interaction.

You might be asking yourself why an HFE got involved with the business value of IT. I know I did. In fact, I briefly considering moving to another business unit when I was first asked to take this on.

I quickly realized that this was not just an effort to be involved in, but one that I should invest a lot of my personal time in for two important reasons:

1. HFE could bring the right level of objectivity to develop data collection methods, especially for tougher areas like employee productivity.

2. A well-run business value program is user-centered. When IT is reporting business value delivered in the customer’s language, it forces IT to understand the customer. I like to think of this as the first step in driving a culture change from tech-centric IT to user-centric IT.

I’ll explore what we have learned in measuring the business value of IT; this includes the good and the bad. I hope to make it easier for others to do the same. I have a good understanding of why we measure the business value of IT. Why would you or any IT organization want to measure the business value of IT?

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tagged: business, measurement, value