Baseline is one of publications I routinely read. I’d recommend it to all of you as well – a lot of insightful articles!
On December 2, I came across an article on Baseline site called “Taking Value Creation to a World-Class Level.” This headline obviously caught my eye because it’s a topic that I’m passionate about – as you all know. But, the summary slides presented quickly upset me.
The first slide gives the big build up stating, “The traditional way that IT organizations create value is changing, with technology innovation being a primary driver of business innovation and value creation.”
Of course anyone in IT would read that and say, “Great! Sign me up!”
But the following slides are then all about IT as a cost center, focusing on the savings that can be made on the “commodities” that encompass IT (yes, including people). These are usually not value-driven initiatives.
The last few slides do mention what I would call “real” transformation approaches, such as the adoption of value-based performance management systems and the integration of “portfolio management of tech-based transformations in the business, based on value maximization.”
To be fair, the article is based on a recent IT research report from the Hackett Group, “IT in the Era of Business Technology Convergence,” which is probably more nuanced. The conclusion is important and I can’t argue with it: “Value-based IT planning is a collaborative process between IT and the business – one that requires a mature business relationship management function and roles.”
Ultimately, the message to organization should be clear: IT and the business must collaborate in order for the value of IT to be visible and actionable. Focusing on IT as a cost center misses the point and ignores the great problem.
Michael D. Harris