Val IT: helping companies add dollar value with ICT

Val IT complements the earlier established Cobit; adding "what to do" to "how to do it"

Yet another formal attempt to align ICT with business objectives has emerged. This time, however, it has the force of a number of major international organisations behind it, and concentrates on establishing positive value for the business.

Formally launched in April, Val IT is the creation of the IT Governance Institute (ITGI), a research think-tank established in 1998. Val IT has the backing of IT organisations such as IBM, HP and Fujitsu as well as business heavyweights such as KPMG and PricewaterhouseCoopers.

A framework comprising a set of published guidelines, in book form, the output of ongoing research and implementation assistance from consultancies, Val IT complements the earlier established and widely used Cobit; Val IT helps organisations with “what to do”, Cobit with “how to do it” or, as Fujitsu consulting director Peter Harrison puts it, “doing the right things” as in contrast to Cobit’s “doing things right.”

There is a significant problem with ensuring that ICT projects generate value for companies, say ITGI members. In a 2004 IBM survey, for example, a sample of Fortune 1,000 CIOs, reported that, on average, 40% of all IT spending brought no return to their organisations.

The watch words here are good governance and good management at the business level, with careful control and monitoring from that level of the IT projects. Individual projects are assembled into programmes of work, with defined objectives, and the programmes are assembled into a “portfolio”, in the way of a share portfolio, as they are investments.

“It’s very much top-down,” says Harrison. It proceeds from business needs to IT programmes. “A lot of governance frameworks come from the bottom up, seeing governance as an extension of project management.”

Alignment of IT programmes with the business starts with top-level executive commitment, accompanied by accountability and measurement, say the Val IT guidelines.

As might be expected the proper formulation of a business plan figures large, but other stages of the process are carefully set out and interrelated, such as “establish reporting requirements”; “establish organisational structures”; “maintain a human resource inventory” and “monitor resource requirements and utilisation”.

But “the framework is exactly that. It’s not rigid,” Harrison says. “We ask first what the organisation already has and what they need.” There is no point in installing “standard” procedures over procedures that are already in use and working well, he says.

Nevertheless, installing Val IT in an organisation will be a major change demanding appropriate change management, and may attack the “power base” of some employees in both IT and management, who will attempt to resist it.

“The real challenge is not in supplying the intellectual property. It’s in making it stick and making it work.”

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