Unlocking Business Value From IT
LBYCOF
BY CORINNE BERNSTEIN
THE INNOVATION VALUE INSTITUTE OF
th«j!N;)imiiiil University of Ireland
fNUl), Maynooth —a consortium
with memhers that include heavy-
weights in business and academia—
has unveiled a management road map
designed to optimize business value
derived frt)m IT investments. The
purpose of the IVI's IT Capability
Maturity Framework (IT-CMF) is
to provide an end-to-end integrated
framework to help IT executives
manage the challenges of develop-
ing their organizations' technology
capabilities while delivering demon-
strable value.
"Companies typically invest 1 per-
cent to 5 percent of revenue in IT, but
without a way to measure and maxi-
mize the return from these invest-
ments, their IT organizations cannot
move from cost centers to value cen-
ters," Martin Curley, adjunct professor
of technology and business at NUI,
Maynooth. and global director of IT
innovation at Intel, said during a
presentation.
Although optimizing tbe value of
IT is a top priority in today's tough
economy, there has been no com-
prehensive, standardized framework
for making investment decisions.
Aiming to address this problem, the
IVI has been developing and testing
ways to align IT investment with
business results.
Formed in 2006. the consortium
has more than 30 members —includ-
ing Tbe Boston Consulting Cîroup,
BP, Chevron, Ernst & Young, Intel,
Microsoft and SAP—and it's growing.
"Now is a perfect time to release
the ITCMl''," Sheila Upton, director
of technology and security risk services
at Ernst & Young and an IVI board
member, tells BaseOm. "The importance
of deriving value doesn't go away
because you're under cost pressure."
In fact, she adds, the downturn has
created an unprecedented situation.
"A number of organizations that are
not in a bad situation want to come
out of tbe downturn in a good posi-
tion," Upton explains. "So they need
to be innovative."
Tbe IT-CMF provides a five-stage
maturity model that can be used as
a framework for mapping out IT
improvements. It consists of four
macroprocesses:
1. Managing I T like a business:
shifting the focus trom technol-
ogy and production to customers
and services
2. Managing the IT budget: invest-
ing in innovative ITsolutions that
deliver better value and perfor-
mance for the business
3. Managing the IT capability:
managing IT assets throughout
the value chain and developing
core competencies
4. Managing IT for business value:
connecting IT investments to over-
all business benefits.
The IT-CMF identifies 36 pro-
cesses covering all activities in an
IT department and categorizes them
under these four macroprocesses. An
assessment of an IT organization's
Please send questions and comments on these GamePlan
articles to edltors@basellnemag.com.
maturity across these 36 processes —
along with comparisons with industry
benchmarks and best practices—will
identify a company's maturity gaps,
as well as opportunities for value cre-
ation, tbe IVI says.
To date, about 250 CIOs and IT
executives bave taken IVI training
courses, and the consortium is plan-
ning about 50 pilot programs in 2009.
"Piloting helps make sure you have
the right content and confirms wheth-
er the framework is right," Upton
says. "Companies that have begun
testing the frame have seen immedi-
ate value."
Intel began testing tbe IT-CMF
in 2007 and, as a result, it bas a bet-
ter way of measuring its performance
and identifying where it sbould be,
Intel CIO Diane Bryant said at the
presentation.
"The IT-CMF provides a holis-
tic view of how CIOs set priorities,
reduce complexity and frame deci-
sions based on business value so that
they are optimized for the company,
not IT," Bryant explained. She added
that by sharing their collective knowl-
edge, companies will be better able to
solve their structural problems.
The IVI estimates that data shi)w-
ing returns on investment for IVI
members will be available by 2010,
once pilot stu(iy recommendations have
been implemented and studied. ^
WWW.BASELINEMAG.COM