Measuring IT Value the Right Way

Last Updated Apr 17, 2009 9:21 AM EDT

For many organizations, putting metrics around IT seems as simple as measuring the effectiveness of a light bulb. If the bulb lights when you turn it on -- if your e-mail servers have 99.999999% uptime -- then IT has proven its value to the organization.

Problem is, the light may be illuminating a room no one uses. The real question we want IT metrics to answer is this: What is IT's value to the business?

Susan Cramm, who writes an IT blog on Harvard Business Publishing, calls this "IT's Dirty Little Secret." Few companies hold their IT execs accountable for creating value. Read her post for methods to achieve this goal, measures such as the aforementioned Balanced Scorecard.

But even lacking a metrics program, Cramm says, you can start measuring IT the right way by asking a simple question: What tangible evidence will we have that this initiative has positively impacted the business?

"The key to managing IT-enabled investments is to apply the measures throughout the life cycle of the initiative," Cramm says. "Make the measures part of the project approval process, then baseline the measures at the start of the project. Then measure changes after each key stage or phase. Keep in mind that the initiative doesn't 'end' with the implementation of the system, but with the attainment of system mastery and use."
Taken together these pieces in CIO Insight and Harvard Business Publishing will have you rethinking how you measure IT returns to the organization.
  • Sean Silverthorne

    Sean Silverthorne is the editor of HBS Working Knowledge, which provides a first look at the research and ideas of Harvard Business School faculty. Working Knowledge, which won a Webby award in 2007, currently records 4 million unique visitors a year. He has been with HBS since 2001.

    Silverthorne has 28 years experience in print and online journalism. Before arriving at HBS, he was a senior editor at CNET and executive editor of ZDNET News. While at At Ziff-Davis, Silverthorne also worked on the daily technology TV show The Site, and was a senior editor at PC Week Inside, which chronicled the business of the technology industry. He has held several reporting and editing roles on a variety of newspapers, and was Investor Business Daily's first journalist based in Silicon Valley.