How to Communicate IT Value in Business Terms

By Lee Pender
Mon, January 01, 2001

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When he took a really good look at his company, Rolls-Royce Marine, Geir Balsnes saw lots of data about its products but very little in the way of infrastructure for accessing this data or checking its consistency. Balsnes, the division’s director of business process improvement, could see iceberglike headaches ahead for his division of the famous Derby, England-based automaker. If his company couldn’t quickly verify the specifications for replacement ship engine parts and other machinery, it would suffer delays and other problems in responding to its customers’ needs. And among those customers are 30 of the world’s navies. n The nuts and bolts of the problems were all about IT. Along with more modern ERP applications, Rolls-Royce Marine had 30-year-old legacy data it needed to access and validate. The company’s lack of infrastructure—and its limited ability to distill a useful view of all this data—also threatened to give inaccurate answers to important questions. More problems were ahead if, for example, Rolls-Royce Marine did not have the accurate specifications required to make or ship replacement parts for its products, Balsnes realized. n To Balsnes, these conditions spoke of the clear urgency for building a data warehouse to provide his company with the answers it needed from disparate stores of data. "We’re trying to make sure that we configure the products that are best to produce," he says, adding that the data warehouse is about "having a consistent product, from sales to delivery." Balsnes also figured that what was clearly valuable to him as an IT investment might not be as clear for other executives at his company. Balsnes says he realized that showing executives the value of a data warehouse would be a lot more effective than just telling them.

IT projects, when proposed, must come across as critical to an organization’s success to win approval. But communicating the value of projects is a game that does not always have easy-to-state rules for CIOs and their business counterparts to follow—especially when precise, by-the-dollar return-on-investment figures aren’t available. Those with experience say expressing IT value works best when it’s part of an ongoing conversation among CIOs and other business chiefs, and when all parties have established their credibility with each other from past collaborative decisions. These executives also say success in communicating about IT value follows when a CIO states a project’s benefits in terms of a company’s overall strategy and its competition’s plans, and when an IT executive acknowledges the user training that comes with technology investments. Two other factors lend credibility to a CIO’s message: when there are pilot tests that give early signs of a project’s tangible worth and when there are follow-up reports establishing the value of projects in progress.

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