If you’ve worked with Evergreen much, you know we constantly harp on our clients to define and measure business value for IT projects and programs. But it’s never easy, for all the reasons I’m sure you already know - here are a few:

• ROI and Business Value are assumed to mean the same thing, which, in my view, they are not. For example, a Sarbanes-Oxley compliance project definitely has business value. The value would be that the company doesn’t get in trouble with the SEC. But what’s the ROI for that? The ROI is negative, unless you want to count the potential cost avoidance of lawsuits and stock devaluation. But you’d get very few CEO’s to agree that SOX compliance is a money-making effort, so the ROI argument doesn’t work.
• IT people are not experienced and comfortable with business value discussions. Traditionally, these conversations have been up to the business to have when deciding among competing proposals to fund. IT’s contribution has been limited to delivering an accurate estimate of the costs and resources involved. But when you’re working on “doing IT better?, IT is the customer, so if you don’t define and measure business value, your proposal will look weaker than competing proposals from the business that do define business value.
• It’s just plain difficult. IT infrastructure investments, process re-engineering, training and continuous improvement are squishy things. The costs have to be shared across many departments and services, the baseline metrics usually don’t exist or are unreliable, or in some cases are simply impossible to measure in any way that the CEO would accept. An excellent example is building a Service Catalog and negotiating SLA’s. What’s the business value of having a policy of 4 hours resolution time for printer issues, versus one business day?

So, are these the same challenges you’re dealing with? What’s your unique problem that’s stopping you from getting your project(s) funded?

Next time, I’ll talk about a useful way to estimate and measure real business value.

Also, check out our new White Paper on “Developing the Business Value for ITIL“.

Till then, keep up the good work,

Scott Braden

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