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May 31, 2006
Debating IT's Value
The April 14 2006 web version of CIO Magazine brings this refreshing editorial "Credit Where Credit Is Due" to the ongoing jousting about how to measure the business impact of IT. In the editorial, MIT's Erik Brynjolfsson advises that, based on recent research conclusions, we need a new approach to talking about IT and business success.
What is "success"? From the perspective of the goals of the measurer, it is performance versus goals. Not coincidentally, when the business and its stakeholders think of "value" they typically think of performance versus goals. It makes perfect sense, then, that each business would want to recognize its particular success factors -- the aspects of its performance that drives it towards its goals. Naturally these goals may or may not coincide with those of other companies at the same time of reckoning. After all, any given time, two companies might not agree on where they need to try to be, but even if that coincides they might not agree on how to get there.
Good debaters know that a lot rides on how a question is phrased, and the right phrasing about IT's value is "what *kind of* value does IT offer to supporting the success factors of business performance?" This makes it more obvious that getting the success factors right is the first step in measuring IT value. In other words, the reason a tool is valuable is because the work that it's doing is valuable work.
This seems blindingly obvious; and more to the point, it is in no sense a new idea. As a concept, it doesn't need to change at all -- rather, when mulling over IT and trying to explain why we ought to have something, we need to abandon the distracting obsession of using asset metrics instead of using performance logic.
Posted by Malcolm Ryder at May 31, 2006 6:58 AM
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