Author Topic: How to Get Value from the Use of IT? COBIT 5-Governance & Management Question#1  (Read 461 times)


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Investing in Information Technology is pivotal to the success of the business and realization of enterprise goals/objectives. To create value for the business using information technology, stakeholders most set clear and realizable goals and put in place necessary mechanism to track the realization of those goals. Stakeholders in thIS case could mean owners, investors/partners, employees, top management, customers as applicable.

The question; "How do I get value from the use of IT?" can also be replaced with "Are end users satisfied with the quality of the IT Service?" The two questions can neither be asked nor answered in isolation given that they are interdependent. Information Technology (IT) can only be said to be delivering value if and when end users are satisfied with the quality of Service(s) being rendered or enabled using IT. Therefore, we will look at these two questions as one and answer them as such.

Answering these two governance and management questions takes us back to COBIT 5 Goals Cascade (see figure 1 below), which links Enterprise Goals with Stakeholders Needs being driven by environmental changes (e.g. regulation, government policies, etc.), technology evolution (i.e. changes in technology), financial gains (i.e. quest for high profit), which are part of Stakeholder Drivers in the goals cascade diagram. Stakeholders needs in the context of COBIT 5 are Business Benefit Realization, Risk Optimization and Resource Optimization.

Now, to create value with or from the use of Information Technology (IT), the following enterprise goals should be in scope and be seen to be realized or being achieved.

1. Stakeholder value of business investment: This speaks to stakeholders needs as earlier enumerated. Different stakeholders have their various definitions of value for the business. Hence, to ensure that IT is delivering the right value for the business, the actual meaning of "value" for every stakeholder most be identified and documented. Different stakeholders in the context of COBIT 5 can be business owners, investors/partners, top management, employees, major suppliers, customers, etc. Value will mean different thing to the various stakeholders. For example, for the owners, it could mean higher returns on investment (in terms of high profit), for investors/partners, it could mean higher market share, for employees, could mean career growth, rewarding employment/higher pay, better working conditions, while value could mean better and efficient service to customers/end users. When these values as perceived by different stakeholders have been identified by the Governance and Management Bodies, then clear strategy on how to effective apply or use information technology to create those values and track their realization can be drawn up and implemented. Remember that it will be difficult to create or deliver value to the business when what value means to the business or stakeholders are not known and clearly understood. As such, could lead to wrong misapplication of technology and wastage of scarce resource. Therefore, for IT to be seen to be delivering value to the business, the value stakeholders attach to their investment in the business most be created and realized with the use of IT. For customers/end users who are also stakeholders in the value chain, quality and efficient service most be delivered to them aided by the deployment of IT for business service. They will be satisfied with how technology has been used to improve their lives and convenient access to service, which answers the second question ("Are end users satisfied with the quality of the IT Service"). The definition of value for customers/end users is convenience and quality of service and when/if deployment of technology has aided the realization of that value, then it will be said that value is being created with information Technology.

2. Portfolio of competitive products and services: This speaks more to the financial perspective of enterprise goals, which is about financial benefit realization via management of product and service portfolios. To create value for stakeholders, information technology (IT) should be use to create competitive products and services that will improve business efficiency and bottom-line. Mix of these products and services are managed in a manner that will create value and returns on investment for stakeholders.

3. Customer-oriented service culture: This speaks to customers' perspective of the enterprise goals as well as the alternate question on this subject, which is "Are end users satisfied with the quality of the IT service?". To ensure that IT create value for the business, the organization must set principle (core values and culture) and policies that will drive its service objectives. There must be a deliberate service culture/value that is customer-oriented, which considering the customer first and ensure that customers are in the center of every product and service innovation within the organization. As such, technology driven products and services provides convenience, simplicity, scale and satisfaction for the customers. Only then can it be said that IT is creating or delivering the right value to the business and meeting stakeholders needs.

4. Business service continuity and availability: The purpose of every business is to make its services/solutions available and accessible to its customers/clients and in turn meet the interest/goals of its stakeholders. To do so, service channels must be available and business continuity must be ensured in order to realize enterprise goals as well as stakeholders' needs. As such, the business must put in place service continuity and availability measures, which includes plans, policies, procedures and resources (people and technology) to realize these objectives. Business continuity and disaster recovery must be planned, tested, operated and reviewed to ensure its effectiveness. Contingency plans for all forms of business and service disruptions must also be established, operated and reviewed for adequacy. Only then can enterprise goals be achieve and stakeholder needs met as services and products running on technology platforms will be available and continuity of the business will be ensured.

5. Managed business change programmes: Managing business changes is in the center of survival of any enterprise. Given the ever changing and dynamic business environment brought about by change in regulation, economic and government policies, technology evolution, competition, innovation and customers growing needs, business changes and adjustments to meet these demands remain paramount to every business. As such, technology, services and processes are constantly changed and re-engineered to meet the needs of the business and stakeholders (owners, customers, employees, etc.). To ensure that technology meets these growing and ever dynamic needs and requirements of stakeholders, business changes must be managed in a manner that will ensure business continuity, minimal disruptions and mitigation/optimization of business risks arising from such changes for the realization of enterprise goals. Changes to process, service and technology must be scoped, assessed, tested, operated, maintained and ended such that will ensure business continuity and realization of value for stakeholders.

6. Skilled and motivated people: This is one of the critical factors to the survival of every business. Human resource management is critical resource to the realization of enterprise goals and delivery of value to stakeholders. The business (both governance and management) must ensure that the right persons are engaged to engineer the process, service and technology. It is to also ensure that the people (employees) are motivated and adequately compensated to drive the objectives of the business. Principles and core values most be established to guide and mold behavior of every employee and high ethical standard/value must be established, communicated and enforced. Policies should also be put in place and communicated to all and exemplary leadership must be ensured by top management and the governance body for the enforcement of the principle and values. Incentives and rewards for performance should be established to motivate and ensure willful compliance to core values and policies while consequence management measures are put in place as deterrent.

7. Product and business innovation culture: Continue improvement and innovation culture within the enterprise will drive the use technology for business service. Technology evolution and change customer taste and quest for new ways of service couple with pressure from competition drive innovation within an enterprise. As such the organization must institute a product and business innovation culture within the business and technology teams for relevance, competitive advantage and market penetration. Value is create for stakeholders via innovative changes to existing products and addition of new products and services that will increase market share, customer satisfaction, penetration and benefit realization.

« Last Edit: February 22, 2018, 07:25:54 PM by barbara »