10 Sep Lesson 1 1-1© 2015 Pearson Education, Inc. . Publishing as
Lesson 1
1-1© 2015 Pearson Education, Inc. . Publishing as Prentice Hall
Chapter 1
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IT Value is the worth or desirability of a thing. (Cronk and Fitzgerald, 1999)
IT Value is a subjective assessment.
IT Value is based on how a business chooses to view it.
IT Value is tied to the business model.
IT Value can be defined by ROI or KPI’s.
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Decisions about IT Value may be made to optimize value to the firm even if they cause difficulty for a business unit or individual.
IT Value needs to be leveraged for the benefit of the firm.
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IT Value is a function of people, process, and technology.
IT Value is also a function of organizational value.
P
e
o
p
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e
Process
Technology
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IT Value has a temporal dimension. Initially, companies spend a considerable amount to deploy new technology with no benefit. Some value is then achieved by solving initial inefficiencies. As use increases, complexity grows and costs increase. Finally, the business is made simpler and efficiencies are achieved.
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Link IT Value directly to the business model. Recognize that value is subjective, and manage perceptions accordingly. Aim for a value “Win-Win” across processes, work units, and individuals. Seek business commitment to all IT projects. Manage value over time.
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IDENTIFICATION +
CONVERSION +
REALIZATION =
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Joint IT-Business mechanisms should be established to identify business and technical opportunities where IT can add value. Establish a formal process for project prioritization.
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Recognize and evaluate opportunities through a joint business-IT structure. Develop a means to compare value across projects. Utilize a portfolio approach to project selection. Establish a funding mechanism for infrastructure.
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Conversion is the transformation of ideas and opportunities into IT value propositions.
Excellent project management, effective execution, and reliable IT operations are critical to IT value creation.
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More projects than resources Insufficient time to complete all projects Training limitations Inadequate technical or business resources Implementation of IT may require significant business process redesign.
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Availability of adequate and qualified IT and business resources
Training in business goals and processes
Multifunctional change management
Emphasis on higher-level learning and knowledge management
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IT Value realization is a long-term process.
To deliver Value – technology must be used extensively.
Measurement is a key component. [Does Expected Value = Actual Value?]
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Plan a value-realization phase for all IT projects. Measure outcomes against expected results. Look for and eliminate root causes of problems. Assess value realization at all levels in the organization. Have provision for acting on new opportunities to leverage value.
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1. Have a clearly defined portfolio value management process.
2. Aim for chunks of Value. 3. Adopt a holistic orientation for
technology value. 4. Aim for joint ownership of technology
initiatives. 5. Experiment more often.
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Track projects as they are developed.
Revisit portfolio decisions to determine if projects should be changed.
Invest in strategic and infrastructure projects.
Develop an ongoing means to ensure value is realized.
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Focus on key areas.
Deliver Value through a series of small focused projects.
Balance short-term and long-term strategic goals.
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Manage and use people, process, and technology.
Anticipate the impact of technology.
Incorporate technology changes into business changes.
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Ensure executive sponsorship for all IT projects.
Develop a culture of joint responsibility and mutual trust between IT and the business.
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Experiment with new technologies on a small scale to minimize risk.
Experimentation enables technology investments to be made in smaller chunks.
Experimentation enables IT Value to be realized sooner.
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This chapter explored the concepts and activities involved in developing and delivering IT value to an organization.
IT value cannot be viewed in isolation.
The entire IT process must be managed from conception to cash.
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