Of course IT adds value! Everyone knows that. But CIOs resolutely refuse to prove value. I've NEVER seen a benefits realisation plan implemented - if you have one that succeeded, let me know, they're rare things. Many CFOs insist on proven ROI for their business cases - which is so narrow that I suspect something else is afoot here.Maybe they don't trust IT? They certainly won't make free with their funds. This presentation covers the five major types of value that IT adds (whether it wants to or not). It is just a question of doing a little value mining. Show value not PowerPoint slides!

1. CXO Advisor
Advise – Innovate – Change
Extracting value from IT
Terry White
terryw@cxo-advisor.co.za

2. Who says IT doesn’t add value

3. Who says IT doesn’t add value
Mostly CFOs
 (Have a look at the many discussions by CFOs on IT value)

4. Who says IT doesn’t add value
Mostly CFOs
That’s because IT doesn’t prove hard number value

5. Who says IT doesn’t add value
Mostly CFOs
That’s because IT doesn’t prove hard number value
And ROI is a really narrow way of describing IT value anyway
 So how do we describe IT value in a way that makes sense to CFOs?

6. Who says IT doesn’t add value
But let’s not take it out on CFOs (they don’t know better)

7. Who says IT doesn’t add value
But let’s not take it out on CFOs (they don’t know better)
CIOs also say IT doesn’t add value

8. Who says IT doesn’t add value
But let’s not take it out on CFOs (they don’t know better)
CIOs also say IT doesn’t add value
 I’m talking at a conference for CIOs in London in May, and one of the agenda
items is:
 “Does IT add value and what can we do about it?”

9. Who says IT doesn’t add value
But let’s not take it out on CFOs (they don’t know better)
CIOs also say IT doesn’t add value
 I’m talking at a conference for CIOs in London in May, and one of the agenda
items is:
 “Does IT add value and what can we do about it?”
Can you see that the topic assumes that IT
doesn’t add value?

10. Who says IT doesn’t add value
But let’s not take it out on CFOs (they don’t know better)
CIOs also say IT doesn’t add value
 I’m talking at a conference for CIOs in London in May, and one of the agenda
items is:
 “Does IT add value and what can we do about it?”
 Last year I was at the same conference and one of the agenda items was:

11. Who says IT doesn’t add value
But let’s not take it out on CFOs (they don’t know better)
CIOs also say IT doesn’t add value
 I’m talking at a conference for CIOs in London in May, and one of the agenda
items is:
 “Where does IT add value and what can we do about it?”
 Last year I was at the same conference and one of the agenda items was:
 You guessed it.

12. Who says IT doesn’t add value
CIOs also “say” IT doesn’t add value, by their resolute failure to actually
prove benefits

13. Who says IT doesn’t add value
CIOs also “say” IT doesn’t add value, by their resolute failure to actually
prove benefits
So the equation looks like this:
Spend $1 million on an IT project based on a business case that says the
return will be $2 million…

14. Who says IT doesn’t add value
CIOs also “say” IT doesn’t add value, by their resolute failure to actually
prove benefits
So the equation looks like this:
Spend $1 million on an IT project based on a business case that says the
return will be $2 million
Then ignore the business case

15. Who says IT doesn’t add value
CIOs also “say” IT doesn’t add value, by their resolute failure to actually
prove benefits
So the equation looks like this:
Spend $1 million on an IT project based on a business case that says the
return will be $2 million
Then ignore the business case
 Don’t develop a benefits realisation plan
 Don’t try to track benefits
 Just get on with the next project (It’s a business problem anyway)

16. Who says IT doesn’t add value
CIOs also “say” IT doesn’t add value, by their resolute failure to actually
prove benefits
So the equation looks like this:
Spend $1 million on an IT project based on a business case that says the
return will be $2 million
Then ignore the business case
Don’t develop a benefits realisation plan
Don’t try to track benefits
Just get on with the next project (It’s a business problem anyway)
And forevermore talk about the cost of running IT.
Never talk about benefits

17. Who says IT doesn’t add value
CIOs also “say” IT doesn’t add value, by their resolute failure to actually
prove benefits
So the equation looks like this:
Spend $1 million on an IT project based on a business case that says the
return will be $2 million
Then ignore the business case
Don’t develop a benefits realisation plan
Don’t try to track benefits
Just get on with the next project (It’s a business problem anyway)
Oh yes. Ask for more money from the CFO

18. Of course IT does provide value
But the secret sauce is…

19. Of course IT does provide value
But the secret sauce is…
The way you describe value

20. Definition of value
Value (n): The relative worth, merit, or importance of something

21. Definition of value
Value (n): The relative worth, merit, or importance of something
Value must be described
relative to something

22. Definition of value
Value (n): The relative worth, merit, or importance of something
Value must be described
relative to something
Value must have merit
(something justifiable)

23. Definition of value
Value (n): The relative worth, merit, or importance of something
Value must be described
relative to something
Value must have merit
(something justifiable)
Value must be important to
the business

24. Definition of value
Value (n): The relative worth, merit, or importance of something
So IT value should be described in terms of:
• What it compares to (not having it; doing it manually, customer retention)
• What justifies it (keep the business running; improve the business, new
business)
• Why it is important (99.99% SLA compliance isn’t important to the business
(relatively). Business results are important)

25. There are five types of IT value that fit these criteria
And only one “adds” value

26. There are five types of IT value that fit these criteria
Think about what IT does for the business:

27. There are five types of IT value that fit these criteria
Think about what IT does for the business:
Supports existing business
operations

28. There are five types of IT value that fit these criteria
Think about what IT does for the business:
Supports existing business
operations
Fixes things when they break

29. There are five types of IT value that fit these criteria
Think about what IT does for the business:
Supports existing business
operations
Fixes things when they break
Services the IT “engine” that
supports the business

30. There are five types of IT value that fit these criteria
Think about what IT does for the business:
Supports existing business
operations
Fixes things when they break
Services the IT “engine” that
supports the business
Helps the business improve
their operations

31. There are five types of IT value that fit these criteria
Think about what IT does for the business:
Supports existing business
operations
Fixes things when they break
Services the IT “engine” that
supports the business
Helps the business improve
their operations
Provides new IT supported
products, markets, channels

32. There are five types of IT value that fit these criteria
And IT value works the same way:
Supports existing business
operations
Fixes things when they break
Services the IT “engine” that
supports the business
The added value that IT can help the business get
from current operations
Provides new IT supported
products, markets, channels
The value inherent in the systems that we provide
The value of continuity
The value of sustainability (we’ll still be viable
next year)
Helps the business improve
their operations
The value that IT can create for the business

33. There are five types of IT value that fit these criteria
And IT value works the same way:
Supports existing business
operations
Fixes things when they break
Services the IT “engine” that
supports the business
Provides new IT supported
products, markets, channels
The value inherent in the systems that we provide
Helps the business improve
their operations
Here’s the problem. We don’t get the
full and proper use from our systems.
So we need to initiate a “value
unlock” initiative

34. There are five types of IT value that fit these criteria
And IT value works the same way:
Supports existing business
operations
Fixes things when they break
Services the IT “engine” that
supports the business
Provides new IT supported
products, markets, channels
The value of continuity
Helps the business improve
their operations
This is the value preservation layer:
DR, BCM, Rapid problem resolution,
compliance with the law,
all preserve value

35. There are five types of IT value that fit these criteria
And IT value works the same way:
Supports existing business
operations
Fixes things when they break
Services the IT “engine” that
supports the business
Provides new IT supported
products, markets, channels
The value of sustainability (we’ll still be viable
next year)
Helps the business improve
their operations
You can choose not to service your car
every 10 000 km. Or you can sustain
the value of your existing engine. IT
Maintenance is a sustainability value

36. There are five types of IT value that fit these criteria
And IT value works the same way:
Supports existing business
operations
Fixes things when they break
Services the IT “engine” that
supports the business
The added value that IT can help the business get
from current operations
Provides new IT supported
products, markets, channels
Helps the business improve
their operations
This is the value of doing things better. The
value of efficiency and effectiveness. Many of
our existing business cases target this “value
add” dimension only

37. There are five types of IT value that fit these criteria
And IT value works the same way:
Supports existing business
operations
Fixes things when they break
Services the IT “engine” that
supports the business
Provides new IT supported
products, markets, channels
Helps the business improve
their operations
The value that IT can create for the business
This value depends on IT maturity and business
strategy (and maturity).
But this “value creation” layer could be the
most productive

38. There are five types of IT value that fit these criteria
And IT value works the same way:
Supports existing business
operations
Fixes things when they break
Services the IT “engine” that
supports the business
Value add
Provides new IT supported
products, markets, channels
Value unlock
Value preservation
Sustainability value
Helps the business improve
their operations
Value creation

39. Intangible value has been proven to come before tangible
value – at different times through the life-cycle
Idea Test the
idea
Design
and
build
Implement
Operate
Retire
Early
adoption
MaturityMajority
adoption
Initiate
AttentionMeaning
Create Operate
1 2 3 5 6 7 84
Intangibles
TangiblesPotential Value
Until you’ve installed something, it’s only
potential value
There’s real “value” for IT to
chase the intangible values first

40. Intangible value has been proven to come before tangible
value – at different times through the life-cycle
Idea Test the
idea
Design
and
build
Implement
Operate
Retire
Early
adoption
MaturityMajority
adoption
Initiate
AttentionMeaning
Create Operate
1 2 3 5 6 7 84
Intangibles
TangiblesPotential Value
Notice also that potential value grows after you’ve had
the business case passed, as your understanding of the
problem/solution dimension increases
Business
case

41. Intangible value has been proven to come before tangible
value – at different times through the life-cycle
Idea Test the
idea
Design
and
build
Implement
Operate
Retire
Early
adoption
MaturityMajority
adoption
Initiate
AttentionMeaning
Create Operate
1 2 3 5 6 7 84
Intangibles
TangiblesPotential Value
Notice also that potential value grows after you’ve had
the business case passed, as your understanding of the
problem/solution dimension increases
Business
case
So keep a benefits register, that is subject to change
as understanding improves

42. Look for different value at different life-cycle stages
Idea Test the
idea
Design
and build
Implement
Operate
Retire
Early
adoption
MaturityMajority
adoption
Plan
AttentionMeaning
Build Run
Cost
Monthly
cost
Monthly
cost
Monthly
cost Monthly
cost Monthly
cost
Monthly
cost
Cost
Value
potential
Value
potential
Value
potential
Value
potential
Intangible
Value
Value
add /
creation
Intangible
Value
Creation;
Add
Sustain
value
Cost-cut
Value
Unlock
Value
1 2 3 5 6 7 8
Value preservation
4

43. Look for different value at different life-cycle stages
Idea Test the
idea
Design
and build
Implement
Operate
Retire
Early
adoption
MaturityMajority
adoption
Plan
AttentionMeaning
Build Run
Cost
Monthly
cost
Monthly
cost
Monthly
cost Monthly
cost Monthly
cost
Monthly
cost
Cost
Value
potential
Value
potential
Value
potential
Value
potential
Intangible
Value
Value
add /
creation
Intangible
Value
Creation;
Add
Sustain
value
Cost-cut
Value
Unlock
Value
1 2 3 5 6 7 8
Value preservation
4
Your benefits
realisation plan
operates here
Your
value
unlock
plan

44. IT ADDS VALUE – IT’S UP TO YOU TO PROVE IT
Terry White
terryw@cxo-advisor.co.za