Deb Krueger- Thavron Solutions
Gartner projects that worldwide IT spend will be $3.8 trillion in 2019.
Does this adequately define the value that IT is bringing to organizations and consumers or does it merely define the dollars expended by the IT departments? If value is simply defined as the dollar spent, the current trend of vendors defining the value of a product or service by the dollars charged is on point.
Should value be measured only on the dollars and cents directly associated with the execution of an activity?
The definition of value according to Merriam Webster is:
1) the monetary worth of something (noun) or to estimate or assign the monetary worth of (verb);
2) relative worth, utility or importance (noun) or to rate or scale in usefulness, importance or general worth (verb).
For the purposes of ITFM, the definition of value that best meets our needs is “relative worth, utility or importance” versus the definition of value by monetary spend. While calculating the dollars spent can be challenging, once accomplished it only gives us transparency on the burden of IT.
The true value obtained by ITFM is measured in metrics that are calculated to meet our business’ needs.
Value is different for each organization and can only be determined within an organization. Some of the things an organization can value are:
- cost savings
- defending where to increase investment
- providing an apples to apples comparison of internal IT costs to services provided by external vendors
- providing a format for discussing the costs of an application
- providing a cost justification for undergoing a new project
- increasing transparency
- many other possibilities.
To measure the value of technology by the monetary spend is missing the bigger picture regarding the benefits received by IT users, consumers and society at large. For instance, if the organization is an innovator and on the cutting edge, the spend may be very high; however, the value is in bringing a revolutionary product to the market, which will change the landscape of technological advances forever.
Today, we are well on our way to technological advances that will revolutionize our driving habits, the way we watch television, the way drugs can be delivered directly to an ailing body part or tumor and the list goes on.
In summary, value is not defined by monetary spend, but instead on the usefulness, importance or general worth to the organization, society and/or the customer. Outside vendors cannot measure value for an organization, value is determined internally. This is the true power of ITFM.