ISACA recently completed a global study to gauge how today's IT organizations are measuring and communicating the value of their IT investments. The results aren't pretty: "...fewer than half have a shared understanding of value across the enterprise, and two-thirds fail to fully measure it."

My questions are:

1. Why should this surprise anyone?
2. Why aren't they?

Specifically, what are the barriers for IT when it comes to:

1. Gaining agreement on a ‘value metric system' which is relevant to the business?
2. Gaining internal support to baseline, measure, validate and report on these metrics?

Here are the two barriers which, to me, are the greatest impediments to any IT Value discussion:

Barrier #1: Know Thyself.

"Who you are" is most likely based on what you measure and how you get measured. Here, the notion of IT Archetypes cannot be ignored.  

You are a service utility? Great - operational performance and cost containment will be how value is assessed.  I suspect this is true for the majority of IT shops - and to the degree that they are so "aligned" with the businesses they support they may get a pass entirely at having to convey ‘value' (i.e. "you're a part of me....as long as I'm doing fine, you're doing fine"). If you are in this category, you probably report to a LOB Executive, not a COO or CFO.

You are a business innovator? Great - then you need to assess & prioritize hundreds of possible growth projects which involve a disproportionate amount of resources, capital and risk.   In this case, you may already have very discrete ways of understanding value contribution - or you aren't getting the green light to do them.  If you are in this category you probably report to a CFO given the Board Level Importance of these decisions.  

The IT Process Institute has done some research on this, as has the IT Governance Institute.   

Barrier #2: Business Relevance.

Unfortunately what the business (CEO, CFO) values may not necessarily ‘fit' with your particular IT orientation. ITIL devotees strive for alignment via a "service orientation."   ITIL doesn't place much emphasis on the financially-driven value / risk metrics such as Return on Capital, NPV, ROI, Fixed Ledger, Tax/Depreciation schedules that are needed to engage leaders in a business discussion and convey value. That doesn't mean IT Services don't deliver value,  only that they will probably be more in line with LOB customer sat metrics where "aligned w/ the business priorities = supporting (well) business systems/services/apps."

So where does this leave us? Well, nothing is going to change unless the service-oriented Utility provider is either asked to change its spots, or they begin to embrace adjacent IT programs which do have a more financial orientation and value set.

Take IT Asset Management - long since the stepchild to just about every new shiny penny IT has.  A great ITAM program can benefit both Archetypes and can act as an enabler for many, if not all, adjacent IT practices such as ITSM, Security, Virtualization and IT Governance.  For the Utility ITAM can drive efficiencies and reduce costs. For the Innovator, it can mitigate the risk of audits and enable detailed Fixed Asset budget planning alongside corporate budget cycles. You want to virtualize what?? Having a software asset management program will be required to ensure the gains of virtualization aren't offset by license penalties and fees for non-compliance.  Making every asset sweat tells the C-Suite you are serious about your IT investments, and have business-relevant metrics which can satisfy both the most staid "utility" or the most hyper-growth "innovators." The guys managing Telco Assets realized this long ago given the massive expenses for which they were accountable.

Similarly, the adoption of Portfolio Project Management programs - where a PMO is effectively the ‘project governance' representative for IT, but with strong connections back to Corporate CFO teams - are driving very meaningful and board-level evaluations of IT, given the heavy operational resource investments required. 

Ultimately, the convergence of these two IT disciplines - ITAM and PPM - can form the backbone of a broader IT Financial Management capability, entirely focused on quantifying the cost, impact, risk and value of IT investments in a way business constituents can readily understand.  They can't go it alone, but they can help lead the way.  For more on IT Financial Management - click here. 

In the meantime, understanding "Who You Are" as an archetype is the first step toward realizing and communicating the value of "what you do." Back that up with metrics which are business-relevant and take a page from your ITAM and PPM teams. They already have a seat at the Investment table because they are already speaking the language of business.

What are the Barriers to IT Value for your organization?  What IT Programs have cracked the code?