“Is your IT value aligned to Business value?”
Business of most of the organizations today is running on IT, i.e. IT is supporting their business in one way or the other, by providing the IT solutions and services required to run the business. It is easy to know the value of the IT products being used for the business, as the products carry a price tag, but it is difficult to find out the value of IT services used by the business to achieve its business objectives. Typically in case of services, value is created and consumed as the service is delivered to the customer. Some of the examples of services are –
- Air Travel – The traveler pays for the air ticket and gets air travel service.
- Hotel Stay – The guest pays for the room rent, and gets room service as per the package.
- Bank ATM – The customer experiences the teller service, during the transaction.
In the above examples, it is evident that the respective organizations are utilizing IT to provide the required services to the customer. Customer is paying for the service package, which he is receiving from the respective service provider (Airline Company, Hotel, Bank etc.) and these organizations are realizing the service value from their revenue / profits.
Similarly, an organization which is utilizing the services of its IT department, to provide business services to its customers, needs to understand the business value of IT in order to realize the investments already done or which it would be doing in future on IT. However the language spoken by IT should be translated into the terms which the business understands, in order to know the business value of IT.
“A business value dashboard is a tool that helps you prove and communicate IT’s value to the business, in a language that the business understands.”
IT complexity is increasing, should reflect on Business Value Dashboard
As said above, the business objectives will consistently fall into one of the three classical economic categories, “growing revenue”, “minimizing cost” or “managing risk”, and each business unit may have one category as a priority. Based on the priority of respective business unit, the IT organization needs to align their products and services for meeting the business objectives. Thus increasing the complexity in IT, and subsequently increasing the complexity in monitoring and measuring the business value of IT.
Figure 2: Business Unit wise Dashboard Tailoring
We can notice that the Infrastructure & Operations are required to clearly define and communicate the business value they deliver, absence of which may lead to the danger of continued budget reductions. Most of the dashboards which are built or available today speak the IT language, and not being used by the Business Executives. Gartner has presented the concept of ‘Business Value Dashboard’ which is an opportunity for the Infrastructure & Operations team to better display the value of their services in the business language. This transformative change about how metrics are viewed is so critical that, by 2017, 40% of Infrastructure & Operations organizations will replace their Executive Dashboards with new Business Value Dashboards.
BVD Initiatives by Emergys
Emergys a complete ITSM solutions and services organization, providing IT management consulting services to global customers, has been pro-actively working on the BVD initiatives. Emergys has built its own IP “MetricEdge” which effectively communicates “IT Dashboards” and “Business Value Dashboards” across the organization. These initiatives have been appreciated by Gartner and mention of Emergys appears in the Gartner Report “G00258032” published on 4th March 2014, summarizing “I&O leaders need innovative ways to communicate the business value they deliver. The success of business value dashboards in showing infrastructure and operations’ impact on business performance will depend on clear documentation, iterative improvement and opportunistic approaches to tooling.”
For further details, watch out for the next posting on the topic.
