McKeen030 - Chapter 3 Linking IT to Business Metrics 13-1...

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Linking IT to Business Metrics Chapter 3 13-1
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IT Today IT creates a competitive advantage for a company? IT and other resources create a competitive advantage for a company? “IT Doesn’t Matter”? Nicholas Carr, Harvard Business Review, May 2003 But: ERP, CRM, SCM, BI systems 21-2
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IT Metrics Goal The Goal of IT Metrics are to  demonstrate that what a company  spends on IT has a DIRECT  IMPACT on the performance of the  firm. What is DIRECT IMPACT? 3
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IT Measurement Approaches “Peel the Onion” – attempt to show how IT adds value on a project-by- project basis. Staff reductions Faster access to information Increased use of technology Improved decision making Improved customer satisfaction Difference between 1-3 and 4-5 4
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IT Measurement Approaches “Put the Onion Back Together” employees who truly understand what their business is trying to achieve can sense the right ways to personally improve performance that will show up at a business unit and organizational level. An IT/business partnership 5
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Why Measure IT Results? 6 “Measurement Counts. What a company measures and the way it measures influence both the mindsets of managers and the way people behave.” (Marchand, Kettinger, and Rollins, 2000) q
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IT Measurement Goals The key to linking IT to business performance is to create an environment where everyone understands what measures are important to the business and are accountable for them. 7
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Related Issues Make Things In the past Systems do not work Systems too costly Systems too late Systems solve the wrong problem, or the problem solved is no longer a problem Strong focus in next chapter as well Can be difficult to link IT and financial gains from IT 8
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Changing IT Role Today? IT’s financial impact on firm involves
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McKeen030 - Chapter 3 Linking IT to Business Metrics 13-1...

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