RSSMeasuring IT in Financial terms – Impractical
ComputerWorld has a piece on the advice section, by Marjorie Luke and James D. Roberts, Co-Efficiency LLC on how organisations should go about the measuring the impact of IT on the Bottom Line.
Excerpts
Measuring the value of IT in traditional financial terms is impractical. You end up having to make a lot of assumptions about the cost of doing things with and without IT support. These assumptions are difficult to substantiate. For example, consider how many more people, workspaces, furniture, equipment and supplies would be needed in the average corporation if processes weren't assisted by IT. And how do you value the speed, accuracy, reliability and volume that today's IT applications bring to the corporation? You can't without a lot of assumptions.
Organizations use nonfinancial terms to measure other aspects of their operations, such as market share and number of employees. We suggest developing a strategic value score to better quantify the value of IT at a point in time. Strategy is about using an organization's operations to maneuver itself into competitive position. IT is about implementing business processes of the operations that execute business strategies. Hence, IT has strategic value that shows up at the intersection of dependence and contribution. In other words, the strategic value of IT is a measure of IT's contribution to executing the organization's strategies.Source: ComputerWorldPrashanth RaiTag(s):IT, Metrics
