Measuring IT business value: let’s get over the puppy dog syndrome

There is no one magic formula for measuring the business value that IT delivers, and many attempts to do so can actually backfire.

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IT leaders can become obsessively focused on convincing their business partners (and themselves!) that their organizations are generating true business value. This obsession is fueled by the recommendations of consultants and research analysts who encourage IT leaders to develop operational dashboards, balanced scorecards, quarterly service reviews, business cases and project post mortems to quantify the business impact of their teams. All too often, after a considerable investment of time and energy in documenting outcomes, fundamental business perceptions regarding IT value remain unchanged. Why is this? Why are perfectly rational and dedicated IT execs reduced to “puppy dogs” who keep bringing their business “masters” proof of their value without ever receiving a pat on the head in return?

Whether you like it or not, you're walking in the footsteps of your predecessors

Business executives develop perceptions about the value of IT early in their careers. They may have sponsored an IT project that ran over budget or behind schedule in a highly visible way, while never quite achieving its initial objectives. They may have personally experienced a critical lapse in IT service while preparing for a meeting, traveling overseas or meeting with a customer. Members of their teams may chronically complain about the difficulties involved in resetting passwords, gaining access to critical applications, the reliability of wifi or videoconferencing facilities or getting a response to a service desk ticket that was filed over two weeks ago!

If business execs have experienced any these occurences in a prior life, they may have already developed a deep-seated perception that their teams are largely successful in spite of IT, not because of it. One or two negative interactions with IT in a past role or at a previous company can leave lasting scars that are not easily undone with metrics, scorecards or business cases.

There's no need for the over-engineered business case

IT organizations can waste inordinate amounts of time and energy in building business cases for IT investments that business leaders find completely unconvincing. A CFO once told me that he never believed an IT business case because “you can prove anything with numbers!”

In all too many instances, business cases rely on soft benefits such as improved employee productivity, avoided future costs, reduced operational risk or regulatory compliance to justify IT investments. A divisional president once told me: “don’t ever bring me another business case that includes productivity improvements – I feel that I’ve bought the same productivity improvements over and over again through the last six projects that I approved!”

Several CFOs have told me that what they’re really seeking in a business case review is passion, not numbers. They want to gauge the visceral, emotional commitment of the project’s business sponsor to the project’s business outcomes. If the project has only solicited lukewarm endorsement from its principal sponsors, then smart CFOs will stop the proposed project in its tracks.

Business case development can and should trigger a series of conversations between IT leaders and business partners about the benefits that can be achieved through specific IT initiatives. Ironically, it’s these conversations and the emotions they inspire that frequently justify IT investments – not the fanciful numbers appearing in the business case!

Beware project post mortems 

Project post mortems always sound like such a logical and obviously good idea. Who can argue with a proposal to measure the outcomes of an IT project to determine if a company achieved the anticipated return on its investment? Post mortems are encouraged – some might say revered – by industry analysts who view them as a barometer of IT organizational maturity.

Unfortunately, IT’s attempts to measure business outcomes – and then attribute those outcomes in whole or in part to its role in a specific project – are fraught with danger. First, IT should not be measuring business outcomes – business partners should be measuring business outcomes! Most people in IT don’t have the aptitude or credibility to be measuring business results. Second, so many ancillary changes in business conditions, organizational structure, work processes, and business leadership occur during major IT projects that it’s intrinsically difficult (borderline impossible) to separate IT’s contribution to the final results from the impact of other factors. This is another area in which IT can waste too much time and energy producing numbers and drawing conclusions that are simply not viewed as credible by its business partners.

Let’s stop being puppies

When it comes to determining whether IT teams are delivering true business value, the ultimate jury is their company’s executive team. No amount of data, documentation or reports will change the mind of a business executive who is disappointed or underwhelmed with IT’s performance. 

Conversely, no data, documentation or reports are needed to convince an elated executive that IT has made a difference following a successful IT initiative. In a past life I was associated with an IT team that delivered a new enterprise-wide CRM system in 10 weeks to ensure it could be rolled out during our company’s annual sales kickoff meeting. Without recourse to any post mortem documentation, one of the divisional Presidents announced that this effort was “the best IT project I have seen in the past three years!” That praise paid many dividends and could never have been garnered through post mortem tables and viewgraphs.

It’s time to stop bringing multiple reports of equivocal evidence to your company’s business leaders as a means of convincing them of IT’s value. It’s time to stop playing number games, and start focusing on what’s really important: winning their hearts first, and minds second. Let’s stop worrying about whether we can run successful projects and focus on what it takes to make our business partners successful. If they can succeed through investments in IT capabilities, our self-perceived need to justify IT’s existence will rapidly disappear!

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