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19 September 2006

Value orientation: be realistic

By Andrew Clifford

If you want to increase IT value and reduce IT cost, be realistic about what IT can do. Limiting your view of IT to automation helps you spot unrealistic requirements that IT can never deliver.

A value orientation says that IT only adds value when it automates the storage, transformation and communication of information. It adds value because it reduces manual effort, increases speed, improves accuracy, or makes the infeasible possible.

Some people disagree. They say that IT enables improved business processes. Although IT can support improved business processes, in a strict sense IT itself does not change business processes. Within a business change project, the contribution of IT is limited to the automation of the storage, transformation and communication of information.

Value orientation helps business managers understand what their systems do. They can view each system as a member of their team, to which they can delegate information storage, transformation and communication. Like all delegation, they do not abdicate responsibility. They retain responsibility for everything the system does, and must apply appropriate controls to the system. A value orientation helps business managers understand the opportunities and responsibilities of their IT.

A value orientation reduces a belief in IT magic.

We often come across situations like: "We had a problem with X. We put in an IT system, but we still had a problem with X." X can be anything: organisational structure, market position, communication problems, control problems. These are human management problems that can not be solved by IT alone. A value orientation clarifies if and where IT can help. It stops IT being seen as a panacea.

I once worked on a project to implement an IT system to support a new department. The new department was formed by merging similar departments from two different companies. After about a year we were still gathering requirements and evaluating packaged software.

To make sense of the project, we did some work to clarify requirements. When we did, the sponsor cancelled the project. We had showed that although we could put in an IT system to achieve a lot of automation, IT could not tackle the underlying cultural and organisational problems. It could not tackle the big problem of who was going to be in charge in the merged department.

A value orientation helps you identify and avoid situations like this. It identifies which business requirements can be met by IT, and which need to be managed outside IT. It helps you slim down IT projects to a smaller, more realistic set of requirements. It helps you spot which projects should be cancelled, before you have spent time and money.

Some would see a value orientation as an admission of defeat, IT withdrawing to a purely technical role. I do not. IT never has had, and never can have, any value other than the value of the technology of information, which is all about automating information processing. We undermine the position of IT if we imagine otherwise. It we want a full role for IT, delivering maximum business value at lowest cost, we have to be clear where IT can add value, and where it can not.

Next: Customer orientation: not what you think

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