Insights on Maximizing and Communicating the Business Value of IT

By Allan Tate, MIT Sloan CIO Symposium Panel Captain and Technologies Services Executive at IBM

One of the afternoon breakouts of the 2014 MIT Sloan CIO Symposium focused on “Maximizing and Communicating the Business Value of IT” (view complete video of panel). The moderator, Chip Gliedman, VP and Principal Analyst, Forrester Research, led the panel through a discussion on how CIOs deliver and measure value in the modern digital enterprise.

In addition to Chip, panelists included Brook Colangelo, SVP & CIO, Houghton Mifflin Harcourt, Harry Moseley, CIO and Managing Director, KPMG LLP, Martyn Wiltshire, Director of Strategic IT Initiatives, SanDisk Corporation, and Todd Tucker, Research Director, Technology Business Management (TBM) Council.

For years, IT organizations have worked to optimize technology and deliver the best value for the money. Today IT is at an inflection point: disruptive innovations, such as social and mobile computing, are creating new opportunities and challenges for CIOs. As the IT landscape shifts from effectiveness and efficiency to customer engagement and business partnership, CIOs are being forced to reconsider the mission of IT. What is “value” in the digital era and how is it measured?

Todd Tucker suggests that the answer is a balanced scorecard, where many levels of value are measured. He says:

The role for a lot of CIO's is one of driving transformation of their own IT organization to be more of a service provider and value partner and, as a result, their metrics for showing value are also changing. . . There needs to be a balanced set of metrics, some business outcome centric (indirectly affected by IT), some service delivery metrics (directly managed by IT), and some operational metrics. It’s a portfolio of metrics that should be used.

A theme that surfaced repeatedly was that technology is the business. The days of IT supporting the business are gone. As such, CIOs need to speak in business terms and are measured on business success. Brook Colangelo said that he is measured on the same business metrics as the CEO. Harry Moseley added that he is measured on how well he stays ahead of the organization – creating solutions before being asked. Martyn Wiltshire avoids getting caught up in the details and complexity of IT: “we do IT to enable and empower the business.”

How do CIOs show that IT investments are paying off? How do they justify investments for products or services that don’t yet exist? Chip Gliedman suggests that today’s IT projects need to focus on time to value instead of time to implementation. Brook Colangelo amplified this point by explaining how he has applied the Agile methodology to all aspects of IT, not just development. He says:

We're at this incredible inflection point in education, and in ed-tech. One of the first things that I did was I took agile methodology and applied it across the entire spectrum inside our group. I had everybody go through user story training so that they see through the eyes of the user, and they apply the same sort of iterative process for producing any type of work. We can't have this "you give me the requirements and I'll come back." Today, it has to be a conversation with the business -- let's try something, let's show you, let's solve, let's iterate.

CIOs need to constantly improve process and productivity. They need to enable the business to do things they can’t do today. Chip Gliedman closed the panel by emphasizing that software (and the infrastructure it runs on) is the brand. Every conversation about the business value of IT should be guided by one simple statement:

We are doing (blank) to make (blank) better as measured by (blank) which is worth (blank).

Maximizing and communicating the value of IT is hard, especially in cases where the value proposition is “soft,” such as a new HR system.  Nevertheless, there are always ways to measure value. As Brook Colangelo says, “you've got to look at everything through the users' eyes.”

You can view videos of all of the panels by clicking here.

Over 50 representatives of the press attended the 2014 MIT Sloan CIO Symposium. Here’s a list of their articles pertaining to the Business Value panel and its panelists.

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