15.571 Generating Business Value From Information TechnologyFour Principles for Driving Business Value from IT#1: Establish clear investment priorities#2: Doggedly track costs and benefits with explicit metrics#3: Use IT to empower people#4: Specify accountabilitiesMIT OpenCourseWarehttp://ocw.mit.edu 15.571 Generating Business Value from Information TechnologySpring 2009 For information about citing these materials or our Terms of Use, visit: http://ocw.mit.edu/terms.Center for Information Systems Research (CISR)© 2009 MIT Sloan CISR – RossCenter for Information Systems Research (CISR)© 2009 MIT Sloan CISR – RossClass 24: Wrap UpJeanne W. RossDirector & Principal Research ScientistCenter for Information Systems Research (CISR)MIT Sloan School of Management Generating Business Value Generating Business Value 15.571 From Information Technology15.571 From Information TechnologyCenter for Information Systems Research (CISR)© 2009 MIT Sloan CISR – Ross Center for Information Systems Research (CISR)© 2009 MIT Sloan CISR – Ross 1 Establish clear IT investment priorities. Doggedly track costs and benefits with explicit metrics. Use IT to empower people. Specify accountabilities.Four Principles for Driving Business Value from ITFour Principles for Driving Business Value from ITCenter for Information Systems Research (CISR)© 2009 MIT Sloan CISR – Ross Center for Information Systems Research (CISR)© 2009 MIT Sloan CISR – Ross 2 Define your operating model– Specify core processes– Specify critical data Debate what to do first– Make sure each deliverable has benefits– But design each deliverable with longer term objectives in mind#1: Establish clear investment priorities#1: Establish clear investment prioritiesCenter for Information Systems Research (CISR)© 2009 MIT Sloan CISR – Ross Center for Information Systems Research (CISR)© 2009 MIT Sloan CISR – Ross 3 Understand IT costs– On average, 71% of IT spending goes to running existing systems.– That 71% should run like a factory delivering multiple products with associated costs/prices.– Know what you're getting for your money. Provide explicit metrics for every project– The debate about metrics clarifies objectives– Metrics need not be financial– Persistent follow-up drives additional value#2: Doggedly track costs and benefits with explicit metrics#2: Doggedly track costs and benefits with explicit metricsCenter for Information Systems Research (CISR)© 2009 MIT Sloan CISR – Ross Center for Information Systems Research (CISR)© 2009 MIT Sloan CISR – Ross 4 To be of value, new systems must involve organizational change. Plan the change. Data does not empower people, but it is a prerequisite to empowerment. The goal is to empower people on very specific decision criteria.#3: Use IT to empower people#3: Use IT to empower peopleCenter for Information Systems Research (CISR)© 2009 MIT Sloan CISR – Ross Center for Information Systems Research (CISR)© 2009 MIT Sloan CISR – Ross 5 Cherish organizational tensions. Accountable people are responsible for fixing what's broken.#4: Specify accountabilities#4: Specify