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Value: IT has it Backwards

thrown awayThe calculation of IT Value has traditionally been a bottom up process trying to build a business case based upon return on investment in an application.  This typically either overstates the value to the enterprise or provides an artificial justification that is not relevant to the business.

Most of this is due to two factors

1.       An overreliance on scientific culture which focuses on breaking objects into smaller components

Balance between the scientific method and considering the big picture is important. Too often the trend is to deconstruct things into their smaller parts while forgetting that things do not equal the sum of their parts.

2.       An over emphasis on cost centers, corporations have placed on most Information Technology organizations

Cost center management is a way to measure benefits to a company but it lacks a way to determine value. Despite this deficiency many companies use this method to determine a ROI measure. Determining value is just as important as benefits, consider an automobile.  The same truck purchased by a web designer in NYC and farmer in Midwest hold different values. A web designer in NYC has public transportation available to him, and more than likely a vehicle is a burden to most in the city, for a farmer in the living Midwest that truck is a necessity for his livelihood.  The cost of the truck may have been identical but the value is drastically different.

About Ryan Malinoski

Ryan Malinoski was a staff writer and technical assistant for CAI's Accelerating IT Success. He joined the team in 2013.

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