Paper
Value Attainment
"Companies invest in IT to achieve a business result. Although many organizations implicitly include this activity as part of project implementation, I call it out separately here because it is a different activity. In fact, many IT organizations do not even attempt to ascertain whether the desired business result has been achieved. In these organizations, determining whether or not a system initiative achieves the expected results is either relegated to the business, or it is not done at all. Failing to assert the value of past IT investments almost certainly dooms a company to fail to achieve these results. Just as purchasing a system is insufficient to implementing it, completing a project does not guarantee that the business value expected is achieved. Only if a company monitors the value from its IT investments will it know if that value has been attained. More important, monitoring will help a firm determine what adjustments are necessary to achieve the expected value from an investment. Failing to monitor value attainment also sets the stage for companies to improperly set the investment level for IT. If the perception is that IT investments have not yielded results, the company will underinvest in IT in the future. If the perception is that IT investments have achieved results when in fact they have not, the firm will continue wasteful spending. Neither is desirable for a CIO. One of the best examples in my career of why value attainment is so important was an international travel and expense solution I implemented at a major Fortune 500 company. The desired business result of this solution was the reduction in overhead from processing paper expense reports. The solution was implemented exactly to the business requirements on time and on budget. At the end of the project, the project team and the business were ready to pat themselves on the back and move on. However, I required that the team assess whether the value proposition for the project had been achieved. They were shocked to learn that not only had no operational savings from the project been realized, but the additional overhead from using the new system had actually created additional cost! While the finance organization was spending less time processing paperwork, there had been no staffing reductions as a result of the system. Moreover, the employees using the system spent twice as much time filling out the online forms as they did the paper forms. What had seemed like success was in fact a total failure, which had resulted from an overemphasis on the requirements to the exclusion of the business results for which the project had been funded. However, by assessing whether the business results had been attained before ending the project, we were able to make adjustments to the system to reduce the overhead on employees and provide better reporting to the finance organization that enabled it to achieve its staffing targets. In short, by monitoring value attainment, we ensured that the value from the project was attained. A successful process for value attainment is a subject worthy of its own book. However, in its most basic form, it requires three things:
1. An intimate understanding of the business
2. Proper oversight of projects
3. A commitment by both IT and the business to manage to results, not just requirements
As such, it is a crucial element in aligning the IT organization with the business. The IT organization that leads the value attainment process will find itself asking the question: ‘‘What can be accomplished with an additional 10 percent?’’ rather than ‘How can you cut an additional 10 percent?'’’