Transcript Unlocking the Value of Technology Investments

Unlocking the Value of
Technology Investments
Speaker Name/Title
Date
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 2009 ISACA All rights reserved.
The Importance of Reliable Investment
You would not buy a car that failed to
start 20 percent of the time.
You would not invest in a mutual fund that
consistently lost 20 percent of its value.
Yet more than 2 out of 10 enterprise IT
projects are outright failures.*
*The Standish Group, 2006
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 2009 ISACA All rights reserved.
IT Investments Bring Both Value and Risk
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IT investments are about enabling business change and can
bring enormous returns if managed properly
Yet, without effective governance and good management,
there is an equally significant risk to destroy value
‘The concept of value relies on the relationship between meeting the
expectations of many differing stakeholders and the resources used in doing
so. The aim of value management is to reconcile these differences …’
— John Thorp, CMC, I.S.P.
Val IT researcher and developer
and author, The Information Paradox
[as adapted from the Institute of Value Management]
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 2009 ISACA All rights reserved.
A New Approach is Needed
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Managing IT-enabled change requires that IT investments be
managed
One approach is to apply the principles of financial portfolio
management to evaluating, selecting and managing IT
investments over their full economic life cycle
A Massachusetts Institute of Technology (MIT) (USA) study of more than 300
enterprises in 23 countries found that faster-growing and more agile firms
such as 7-11 Japan, United Parcel Service (UPS) and ING Direct all had a
portfolio approach to IT management …
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 2009 ISACA All rights reserved.
Val IT™
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Proven practices and techniques for evaluating and managing
investment in business change and innovation
Val IT helps executives:
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Increase the probability of picking winners
Increase the likelihood of IT investment success
Reduce surprises from IT cost and delivery date overruns
Reduce costs due to inefficient investments
 2009 ISACA All rights reserved.
Developed by the Leaders in IT Governance
Created by ISACA,
Fujitsu Consulting, ING and SeaQuation
Professional association with 86,000 constituents.
Worldwide leader in IT governance, control, security and assurance.
Offers the CISA, CISM and CGEIT certifications.
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 2009 ISACA All rights reserved.
Why Val IT™?
An organisation needs stronger governance over IT
investments if:
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IT investments are not supporting the business strategy or
providing expected value
There are too many projects, resulting in inefficient use of
resources
Projects often are delayed, run over budget, and/or do not
provide the needed benefits
There is an inability to cancel projects when necessary
It needs to ensure compliance to industry or governmental
regulations
 2009 ISACA All rights reserved.
A Comprehensive Approach
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Many enterprises practice elements of Val IT™ already
Val IT™ provides a consistent, repeatable and comprehensive approach
IT and business become equal shareholders because Val IT™ helps
management to answer these key questions:*
The strategic question
The value question
The architecture question
The delivery question
* Based on the Four ‘Are’s as described by John Thorp in his book The Information
Paradox, written jointly with Fujitsu, first published in 1998 and revised in 2003
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 2009 ISACA All rights reserved.
The Seven Principles of Val IT™
IT-enabled investments will:
1. Be managed as a portfolio of investments
2. Include the full scope of activities required to achieve business value
3. Be managed through their full economic life cycle
Value delivery practices will:
4. Recognise different categories of investments to be
evaluated and managed differently
5. Define and monitor key metrics and respond quickly
to any changes or deviations
6. Engage all stakeholders and assign appropriate accountability
for delivery of capabilities and realisation of business benefits
7. Be continually monitored, evaluated and improved
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 2009 ISACA All rights reserved.
How Val IT™ Works
Value Governance
(VG)
Portfolio
Management
(PM)
Develop and evaluate the
initial programme concept
business case.
Investment
Management
(IM)
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 2009 ISACA All rights reserved.
Establish informed and
committed leadership.
Define and
implement processes.
Define portfolio
characteristics.
Align and integrate value
management with enterprise
financial planning.
Establish effective
governance monitoring.
Continuously improve value
management practices.
Establish strategic direction
and target investment mix.
Determine the availability
and sources of funds.
Manage the availability
of human resources.
Evaluate and select
programmes to fund.
Monitor and report
on investment
portfolio performance.
Optimise investment
portfolio performance.
Understand the candidate
programme and
implementation options.
Develop the programme
plan.
Develop full life cycle costs
and benefits.
Develop the detailed
candidate
programme business case.
Launch and manage
the programme.
Update operational
IT portfolios.
Update the business case.
Monitor and report on
the programme.
Retire the programme.
Top Organisations Support Val IT™
Organisations struggling to execute IT strategies that
deliver business value and to communicate this value
to stakeholders should evaluate Val IT as a tool for
improved value delivery.
- Craig Symons, Vice President, Principal Analyst
Forrester Research
in the Report “From IT Governance to Value Delivery”
22 June 2007
For more information, please visit www.isaca.org/valit
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 2009 ISACA All rights reserved.
Getting Started
Visit www.isaca.org/valit to learn more or download a free copy of
the Val IT™ framework, Getting Started With Value Management
and The Business Case.
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 2009 ISACA All rights reserved.