It's very current and cool to talk about IT providing the business sponsors with value and IT being aligned to the business and it's initiatives.
What does that actually mean?
This means that IT processes, both operational and project based, must be clearly instrumented to show costs and variances. This information is important for two reasons
- Transparency in costs and benefits. This means that business sponsors need to understand how much something is going to cost and how the estimate was arrived at
- A clear demonstration of ROI, perhaps a suitable target might be 30%, i.e for every dollar of IT spend we need $1.30 back. Sometimes that is easy to measure because there is a known saving or additional revenue opportunity directly linked to our IT investment. However it is usually much harder to quantify our ROI
Once we can see such information (costs and benefits) it becomes much easier to make choices based on which initiatives provide the business with the ROI it needs to address it current and future initiatives.
- Historical information can be the basis for more accurate estimates
- Business can be clearly shown where their precious funds are being spent as it happens