If they are to survive the current global economic crisis, and thrive beyond it, enterprises must demonstrate that they understand how to create value, have strategies capable of delivering value both quickly and over the long term, and have a track record of successfully executing those strategies.
Yet, when it comes to realizing value from their substantial investments in information technology (IT), many enterprises today have an expensive gambling habit. The potential winnings are high, the stakes keep getting higher, yet the odds of winning remain consistently low. The underlying cause of this problem is that we continue to focus on the technology when we should instead be focusing on the changes that IT both enables and requires. The challenge facing boards, executives, business and IT management is to ensure that effective governance mechanisms are in place to ensure that such investments in IT-enabled business change deliver optimal value, at an affordable cost, with an acceptable level of risk.
The Benefits Realization approach, as described in “The Information Paradox“, was based on the premise that organizations must stop thinking about IT investments as technological “silver bullets”. The reality today is that we are no longer investing in IT – we are investing in IT- enabled change. The challenge today is not managing technology, not that this is an easy proposition, but managing massive organizational change – change that is enabled by technology, but of which technology is only a small part – change that requires that we not only manage IT differently but also manage our organizations differently.
The Benefits Realization approach provided a new perspective to managing such massive organizational change – the Benefits Realization approach:
- Moves beyond stand-alone IT project management to business program management, where technology initiatives contribute to business results in concert with other elements of the overall business system, including organizational, process, and people initiatives;
- Proactively manages change as an integral part of business programs, rather than as an afterthought in reaction to “implementation problems”;
- Shifts from free-for-all competition for resources to managing a number of business programs through a disciplined portfolio management approach; and
- Adopts a full cycle governance view of managing projects, programs, and portfolios from “concept to cash” rather than just from “design to delivery,” with clear accountability to ensure clear business sponsorship of programs, and effective measurement systems.
The Benefits Realization approach has been successfully adopted by many organizations across the world, and they have derived great value from it. The approach provided the basis for the Val IT™ framework from the IT Governance Institute (ITGI) that has been described by Forrester as being “grounded in real world practices”, “a best practice model for IT value management”, and providing “a detailed roadmap for education and implementation.
However, while looking at IT governance alone will generate a lot of articles, books and work for consultants, it will unfortunately be of limited value. The problems with IT governance are a symptom of broader problems with enterprise governance. What we have here is a labeling issue – as long as we continue to talk about IT value, IT alignment, IT strategy and IT governance we will be dealing with the symptom, not the problem, and, in doing so, we risk merely perpetuating the problem. We must instead drop the IT label and look at the governance of all assets, including but not limited to IT, in the context of an overall, integrated approach to enterprise governance – a Strategic Governance approach.