Reply to the following discussion in about 150 words
Five Principles for Delivering Value
Principle 1: Well defined portfolio for value management:
IT projects can be difficult to manage especially when businesses have multiple projects and are trying trying to solve different problems at the same time. Each project requires investment in terms of skill , technology and money. This makes it important to evaluate different project at timely manner and evaluate the Return On Investment(ROI) based on well defined milestones.
A portfolio value management process should include an ongoing means of ensuring that value is realized from an investment. Management must monitor expected outcomes at appropriate times following implementation and hold someone in the organization accountable for delivering benefits (Smith and McKeen, 2015, Page 11).
IT solutions used in a business deliver value at various levels of operation. Each project can undergo a change in scope in terms of the problem covered or limitations of technology.
For example: a manufacturing company is undertaking two business projects- First one is to track delivery of goods or transport and second to implement a business solution enabling them to track finance, budgeting, payroll, customer relations, etc.
The first project can be extremely lightweight and subject to ever changing transport industry and can be outsourced if implementation cost is high in house. This is only possible if management keeps on evaluating the value of project in the light of budget milestones but also that other elements of conversion effectiveness are being addressed (e.g., business process redesign, training, change management, informa- tion management, and usability) (Smith and McKeen, 2015, Page 11). The second project on the other hand can be considered long term and requires huge investment in special skills and design decisions which are cost efficient to build inhouse. This project could need a proper process for monitoring throughout the design and development process.
Hence, it is essential to define a “metric” to measure success. If one problem gets too expensive due to skills required to implement an IT solution it is advisable to outsource and reduce cost. For instance a transport can be outsourced to thirty at contract basis. This is only possible if we have guidelines and consensus on measuring value of IT solutions across all projects and compare their progress. This helps management to pull in resources and investment from low ROI project into one which is significantly profitable as per the value metric.
The projects can be measured by evaluating the following 5 categories based on weightage they mean to a business:
Principle 2: Aim for Chunks of value.
A set of small and well defined problems are easier to tackle than an oversized complex one. Simplicity makes planning and management easy over a longer period of time. Business problems are often related to one another and can act as triggers. Furthermore, solving every problem at the same time may not always be feasible due to constraints in time, money, human resources and technology. Therefore, there is more incentive in breaking down a problem into smaller related chunks to achieve short and long term objectives. For example, due to social networking and other online activities consumer data abuse and privacy has become a concern and many companies are working to devise a solution to protect user identity and privacy. If we think about solving the data protection problem as a whole, it can seem like a daunting task. However, if we break it into smaller tasks such as allowing the user to delete all of their online activities and restricting third party access to user data, this task can easily be tackled to achieve the desired results.
Principle 3 : Adopt holistic orientation to technology value.
Technology is changing rapidly. A business which adopts technology grows faster than its competitor. For example, in the year 2010 the mobile industry started to boom and businesses increased their online presence and tried connecting with their customers in a way they never did before. A real world example of this is Starbucks. When Starbucks launched its mobile application in 2011, it increased its user base and loyalty due to investment in technology and digital marketing.
Principle 4: Aim for joint ownership for technology initiatives
A business and IT should go hand in hand. A business problem can be substantially reduced by effective use of technology. This needs a visionary leadership. For example, Tesla Motors had their first concept car as just an electric vehicle without any autopilot capabilities. However, in order to make the car a much viable option compared to other low budget electric options, their leadership invested significantly in R&D and announced autopilot 8.0 in 2013-2014. A car hardware company invested its resources into software and captured a bigger market share compared to other brands that offer the same mechanical function.
A management should be organized to have an accountable representative for every benefit from IT value. This may need constant reorganization and redesign to keep harmony between executives and floor IT initiatives.
Principle 5: Experiment more often
Success of a business can be based on its ability to innovate and evolve. However, innovation and evolution require heavy experimentation. Many industries are undergoing a series of innovation rapidly. For example, sophisticated robots are being deployed in the medical industry. Machines fully capable of preparing meals are being deployed at food joints.
Experiments are important as they can help uncover risks, limitations and scalability of a project. An investment in an IT solution may seem like a good idea on paper but when done in the real world, it may turn out to be a bust. In order to achieve success, experiments must be well defined and a quick proof of concept or test should be developed.
Which of the five principles do you think is most important?
In my opinion, experimenting more often is the most important principle. I believe in this because if businesses don’t experiment they would never know what could have come out of it. IT has impacted our day to day like. It has become easier to get an education, book travel, seek medical advice, etc with adoption and development of IT. New businesses are opening up quickly just as new problems are arising quickly.
In order to realize IT value, management needs to have trust and confidence in the approach taken to tackle the problem. Without experimenting and constant innovation it is not possible to even start projects. After this portfolio management, focusing on chunks of value can be practiced. Also the business orientation and join ownership can be realized when the experiments or proof of concept is available.
McKeen, J. D., & Smith, H. A. (2015). IT Strategy: Issues and Practices, 3rd ed. Pearson.
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