CIOs are increasingly feeling the heat to provide results on IT investments, but few of them are doing enough to measure the value they get out of technology, according to the results of a global survey.
Only half of the 1,217 senior IT executives surveyed by governance industry association ISACA said they measure the value of their IT investments “to some extent,” while one in 10 don’t do it at all. At the same time, half of the respondents believe they are realizing between 50-74 per cent of expected value from their IT investments, and nearly a fifth believe they are realizing 75-100 per cent. ISACA, which claims more than 80,000 members worldwide, fielded responses from nine countries, including Canada.
ISACA international vice-president Robert Stroud said he was “perplexed and concerned” by the survey results, particularly when the organization has been promoting a framework called Val IT for several years which is designed to deal with measuring the results of technology spending and management.
“It’s got to be alarming to the management of those organizations,” he said, adding that this is still a relatively new discipline. “We should also look at it from the other way around, and say that nine in 10 are measuring it to some extent.”
Val IT was spawned from COBIT, or control objectives for business and related technology, which offers an over-arching best practices framework for managing technology in corporate enterprises. ISACA, which has 10 chapters across Canada, is seeing considerable interest in Val IT, according to Stroud.
“Intelligent CIOs are clearly understanding that the benefit or value must be in business terms and in conjunction with business’s own initiatives,” he said. “One of the techniques is to look at the organization’s balanced scorecard first and then correlate it with the IT metrics that they leverage to support those. It requires, instead of bottom-up thinking, a top-down approach.”
Peter Davis, a Toronto-area consultant who offers training in COBIT and Val IT, said he has seen little demand for the framework so far but stressed that the elements of measuring value have always been a part of COBIT.
“Value delivery has been high on CIOs’ wish lists, but for some reason people just aren’t providing it to them. The metrics and stuff, and unless you’re looking at the Val IT metrics, aren’t really providing the information they need,” he said. “This is a process. It’s not a situation where you implement Val IT and you’re finished. It’s ongoing.”
The recession may have initially taken organization’s eyes off governance, but that’s changing, Stroud said.
“The first phase was cost-cutting, with whatever method we could find. Now, with the second phase, we’re looking for the value,” he said. “If anything, this economic crisis has assisted the implementation of frameworks from COBIT and Val IT.”
Of all the countries surveyed, India showed the greatest focus on measuring IT value. ISACA said 70 per cent of India-based organizations have a framework and 57 per cent said they full measure IT value. Davis said this made sense.
“They’re trying to sell outsourced services,” he pointed out. “If they can say they are using COBIT and Val IT and have CMMI level 5, (potential customers) get some comfort from that.”
Davis said he will be teaching a five-day course with ISACA towards the end of the year that will include a Val IT component.