Value Delivery

Value is in the eye of beholder – for successful companies, that translates to a need to understand customer perspectives on value and work toward meeting them. Understanding your customer’s business priorities is critical to assessing value metrics.

Categorizing and Prioritizing Investments

Non-discretionary investments required by compliance protocols are set in stone, however discretionary investments must be planned and executed in an order carefully determined by need. Investment categories include:

  • Transactional
  • Informational
  • Strategic
  • Infrastructure

Prioritization also demands careful planning to ensure execution proceeds at the most advantageous time, e.g. projects that simultaneously are simple to implement and yield improved return on investment should be moved to the front of the line.

Best Practices

Everything begins with a consideration of strategic perspectives. Ideally (and perhaps crucially), all aspects of the process toward the desired outcome should be embraced, including technology, business, organization and people.

Next, assemble a portfolio of projects that are determined from compelling business cases. The definition of “compelling” changes over time, sometimes slowly and occasionally with extreme speed. At all times, organizations need to be conscious of this change and able to develop new business cases that meet the current definition of compelling.

Organizations should have an investment management committee in place to determine the relevance of projects, as well as direct operations toward achieving them. In an IT context, this helps manage expenses, maintain focus and ensure strategic concerns and IT energies are integrated.

For ultimate benefit realization, all planned programs should follow the traditional schedule of life cycle governance: strategic alignment, value delivery, risk management, resource management, and performance measurement.

Performance Measurement

Value delivery hinges on accurate performance measurement to determine if the proposed plan is in fact workable, or likely to return value. This includes financial measures – internal rate of return, return on investment, etc. – and non-financial measures, like the balanced score card. The balanced score card is still only adopted by 50-percent of companies, despite it’s proven utility. The balanced scorecard approach yields a comprehensive view of IT performance and alignment with overall strategic direction. It also demonstrates to other departments that IT contributions and activities can be measured by common metrics, improving integration of all departments.

Board and PMO Working Together

The typical corporate governance structure empowers an executive board with strategic direction and a steering committee with implementation. Support for both is provided by technical and investment management committees.

A more aggressive program includes a project management office (PMO) to directly support implementation of strategic programs. A PMO provides review, evaluation and guidance functions on a project-by-project basis. Included in this portfolio are resource performance, risk management and cost transparency, along with the ability to nudge projects into alignment with strategic business objectives. The PMO maintains close contact with the board to ensure there are no surprises down the road.