Blogger: Lyn Robison
Enterprise IT can be expensive. Businesses make significant investments in IT. How does a business know whether they are getting their money's worth from IT?
This is the topic of a recent Burton Group telebriefing (IT Metrics: How Useful Is The Information That IT Produces?).
When it comes right down to it, there is a cost side and a value side to the IT ledger. If the value side of IT is greater than the cost side of IT, then IT is profitable. That's what the business wants: profitable IT. If IT provides more value to a business than it costs a business, the business will be willing to pay for it, even in lean economic times. My telebriefing on IT Metrics offers some guidance on how to measure the business's perception of profitable IT.
There is another way to look at IT profitability. You can see it in terms of the gozintas and gozoutas. Every information system requires data in, and is supposed to provide information out. You can assess the value of an IT system using the ratio of the information that goes in compared with the information that comes out.
A dangerous information system is one that provides erroneous information (the information could be inaccurate or misleading, or the system could disclose sensitive information to people who are not authorized to see it). An information system that provides no useful information to businesspeople is useless. Providing part of the information that went in would mean the system is a waste. And providing the same information would make the system unnecessary. Only those systems that meaningfully combine data and properly process it and then provide it to the right people are useful.
How many IT systems fall somewhere in the unnecessary to dangerous range? Unfortunately, quite a lot of them. Given these trying economic times, how long can businesses afford to spend money and resources on information systems that range from unnecessary to dangerous?
Competent data management and information delivery are the keys to Profitable IT.