Exam 1: Developing and Delivering on the IT Value Proposition

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Principle 1. Have a Clearly Defined Portfolio Value Management Process. Every organization should have a common process for managing the overall value being delivered to the organization from its IT portfolio. This would begin as a means of identifying and prioritizing IT opportunities by potential value relative to each other. It would also include mechanisms to optimize enterprise value based on how the organization wants to allocate its resources. A portfolio value management process should continue to track projects as they are being developed. It should ensure not only that projects are meeting schedule and budget milestones, but also that other elements of conversion effectiveness are being addressed. A portfolio value management process should include an ongoing means of ensuring that value is realized from an investment.
Principle 2. Aim for Chunks of Value. Focusing on a few key areas and designing a set of complementary projects that will really make a difference is one way companies are trying to address this concern. Many companies are undertaking larger and larger technology initiatives that will have a significant transformational and/or strategic impact on the organization. However, these initiatives are aiming to deliver major value through a series of small, focused projects that, linked together, will result in both immediate short-term impact and long-term strategic value.
Principle 3. Adopt a Holistic Orientation to Technology Value. Because value comes from the effective interaction of people, information, and technology, it is critical that organizations aim to optimize their ability to manage and use them together. Adopting a systemic approach to value, where technology is not viewed in isolation and interactions and impacts are anticipated and planned, has been demonstrated to contribute to perceived business value. Managers should aim to incorporate technology as an integral part of an overall program of business change rather than dealing with people and information management as afterthoughts to technology
Principle 4. Aim for Joint Ownership of Technology Initiatives. This principle emphasizes that all people involved in a project must feel they are responsible for the results. This perspective is reinforced by research that has found that the quality of the IT-business relationship is central to the delivery of IT value. Mutual trust, visible business support for IT and its staff, and IT staff who consider themselves to be part of a business problem-solving team all make a significant difference in how much value technology is perceived to deliver.
Principle 5. Experiment More Often. The growing complexity of technology, the range of options available, and the uncertainty of the business environment have each made it considerably more difficult to determine where and how technology investments can most effectively be made. Executives naturally object to the risks involved in investing heavily in possible business scenarios or technical gambles that may or may not realize value. Undertaking pilot studies is one way of understanding of the value proposition for a particular opportunity without incurring too much risk. Such experiments can prove the value of an idea, uncover new opportunities, and identify more about what will be needed to make an idea successful.

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First, potential opportunities for adding value must be identified. Next, these must be converted into effective applications of technology. Finally, value must be realized by the organization. Together, these comprise the fundamentals of any value proposition.