Ensuring IT Investments Produce Business Value: An Agricultural Approach
Organizations spend large sums on Information and Communications Technology but are often left wondering if they get any returns on these investments. IT is seen as essential to transforming organizations but too often just consumes funds without meeting expectations. CFOs are frustrated by the focus on technology that often cannot be related to the organizational objectives. As a CFO, are you in a position to:
- Understand how your IT investment/spend fits with organizational objectives?
- Assess the business value that will be returned from a specific IT investment?
- Assess the overall business value of the large IT budget?
- Kill IT projects early if they are not going to provide the necessary ROI?
Dr. Gerald Grant of the Sprott School of Business at Carleton University and Rob Collins, former CIO of Cognos and the City of Ottawa, argue that instead of applying a rigid engineering approach to governing and managing IT, executives should think more like a farmer, taking an agricultural view that gives primacy to delivering the ‘harvest’: business value resulting from IT investments. By focusing on that harvest, instead of only the schedule, organizations can ensure that they get the results that they need or that they can kill projects early before they have wasted precious resources. It also provides a basis to compare IT investments to other business investments.
This approach is not limited to new projects. This same Agricultural Model can be used to audit existing IT systems for business value. This can provide the basis for better management of those large IT budgets and create common ground between IT and the rest of the organization.
Organizations should be able to audit the value that they are getting from IT investments just as they can audit any other part of the business. Click here to learn more about Value Audits.