Description
Book SynopsisPRAISE FOR ACHIEVING BUSINESS VALUE FROM TECHNOLOGY Clearly, IT investments have never before played such a critical part in business growth. The book addresses the weakness existing in most management systems involving the lack of a systematic process to realize the economic benefits of the IT investment and provides a clear A-Z methodology for business to bridge this gap. This book is clearly written for all levels and backgrounds in business management and is a must-do for those whose business involves IT, is considering IT, or would like to significantly tailor IT investments for their economic advantage.
Professor Richard P. Wool, University of Delaware, President and CEO, Cara Plastics Inc.
Tony Murphy addresses the difficult question of the value of IT investments head on. He translates an elegant theory into effective practice. The case studies in the book effectively reinforce his key messages.
Dr. Dermot Moynihan, Senior Vice Preside
Table of Contents
Introduction xi
Chapter 1: Industrial Age Thinking for Information Age Problems 1
Business Value from Information Technology (BVIT)—A Large and Growing Problem 2
Learning from Case Studies 3
What Do These Case Studies Have in Common? 11
Some Historical Perspective 12
Drawing Conclusions from These Changes 23
Revisiting the Case Studies 27
Industrial Age Thinking for
Information Age Problems 30
The Limitations of Financial Metrics 30
The Value of Financial Techniques for IT Investment Appraisal 36
What Else Do We Need? 36
Summary 38
Chapter 2: The Five Pillars of Benefits Realization 39
Pillar 1: Strategic Alignment 42
Pillar 2: Business Process Impact 45
Pillar 3: Architecture 52
Pillar 4: Direct Payback 61
Pillar 5: Risk 66
Summary 76
Chapter 3: P2—Process 77
Step 1: Setting the Ground Rules 81
Step 2: Defining IT Value Standards 90
Step 3: IT Value Analysis 95
Step 4: IT Value Project Management 113
Step 5: IT Value Achievement 118
Step 6: IT Value Management 127
Selecting Specific Products and Vendors 140
Refinements 142
Sensitivity Analysis 146
Investment Scope 147
Summary 148
Chapter 4: P3—People 151
Roles—A Foundation Stone of Effective Governance 153
The IT Council 155
The IT Investment Board 157
The Office of Architecture and Standards 159
The Project Office 163
Summary and Next Steps 165
Appendix A: Sample Value Standards 169
Strategic Alignment 169
Payback 171
Architecture 173
Business Process Impact 174
Risk 174
Appendix B: Sample Value Standards Scoring Metrics 177
Business Process Impact 177
Architecture 180
Risk 181
Appendix C: Completed Weightings 183
Appendix D: From the Field—Investment Case Worked Example 185
Appendix E: Quantifying End-User Benefits 201
Preliminary Information 201
Opening the Meeting 202
Resolution of Inconsistencies 202
Quantifying the Benefits 203
Refine Quantification 205
Cross-Verification 205
Appendix F: Gartner Recommended Approach to Risk Management 207
Collaborative Risk Management 207
Risk Assessment Processes 208
Predictability and Complexity of Risks 215
Summary 216
Appendix G: Analytical Hierarchy Process/Analysis 217
Appendix H: Probability Analysis (Monte Carlo Simulation) 227
Appendix I: Gartner Approach to Change Management: Strategic Planning Assumption 231
The Need for Change Management 231
The Human Response to Change 233
Appendix J: Financial Metrics 239
Net Present Value (NPV) 239
Internal Rate of Return (IRR) 239
Index 243
