Can you track the revenue of IT?

Can you track the revenue of IT?

Hewlett Packard is going through an IT transformation according to Jorge Lopez, VP and distinguished analyst at Gartner. Lopez told WTN News that Hewlett Packard’s CEO, Mark Hurd and CIO, Randy Mott are completing a 3-year transformation project that tracks the value of IT initiatives.
Chris Murphy, editor of InformationWeek noticed the same trend. In an editor’s note in a recent article, Murphy asks “Does your company capture the value of what IT delivers, or are the conversations only about how much IT costs?” The article digs into that transformation, which ranged from consolidating global data centers to adopting a single IT planning process. Part of that planning is measuring ‘revenue of IT’, the hard-dollar and intangible benefits that a project delivers in the 12 months after full implementation.
In the InformationWeek article HP’s CIO Randy Mott says, “Every business has revenue, but IT typically doesn’t … because we don’t have the discipline to capture the benefit of projects in a way that we can show the CEO or executive committee and have numbers that are real.”
The article also mentions HP’s revenue of IT figure comes out of a planning process where business units, finance, and IT teams agree on the benefits a project is supposed to deliver. It’s not easy to get to that point as the article explores the obstacles. To Mott, the critical factor for measuring IT’s value isn’t the exact metrics a company uses. It’s that everyone in the company uses the same yardstick.
Jorge Lopez, will deliver the opening Keynote address at the Fusion CE0 – CIO Symposium 2009 on the subject of CEO Concerns 2009: Business Leaders’ Top Concerns and How IT Should Address Them. Many concerns of the CEO ultimately become concerns of the CIO. Cutting costs, enabling new markets, integrating acquired businesses, and more are issues that are decided in the board room and end up on the CIO‘s desk. This presentation will explore the concerns for 2009 and for 2010 based on Gartner research and advise IT leaders what to do about them.
Chris Murphy will also moderate a keynote address at Fusion to be delivered by Dr. Ajei S. Gopal, executive vice president, products and technology Group, CA Inc. titled Innovating in Tough Times.
Dr. Gopal will discuss how to survive — and even thrive — in tough times. “Organizations need to innovate, but that doesn’t mean buying into the latest trend or investing in the “hot” technology of the moment. Practical, effective innovation is about recognizing current market conditions, the competitive landscape, the needs of customers and the strategic direction of the organization and devising new approaches to deliver value,” says Gopal.
With tightening budgets, new IT projects are liable to face resistance in the C-suite and the boardroom. According to Gopal each new initiative not only incurs cost, but also adds complexity to the IT environment and increases risk.
So how do CIOs do more with less, secure the benefits of IT advances and deliver rapid return on investment, without imperiling the security of the enterprise? “The key is management across the silos of IT. Management must be central to the planning of any IT project. As many companies retrench in the face of an uncertain economy, this is the time to innovate with IT projects that can transform the business and position the organization for future growth,” says Gopal.
The conference will take place March 4-5, 2009 at the Fluno Center in Madison, Wisconsin and is produced by WTN Media. For more information visit www.fusion2009.com.
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Mike Klein is the president and editorial director of the Wisconsin Technology Network. He can be reached at mike@wistechnology.com.