What is the IT Value Stack?

The IT Value Stack is a model for maximizing and measuring  the value obtained from one’s IT investment.

The underlying drivers are:

• The IT industry has a poor delivery record and needs to “grow up”;
• Business people do not know what IT people are talking about (and this does not seem to bother IT people);
• Users are generally suspicious of IT people;
• Executives are frustrated that they cannot measure whether they are getting good value from their IT investment;
• There is a perception that all problems involving IT are ipso facto the fault of the IT department;

Many businesses do not know what business they are in.

The IT Value Stack is so called because each of the areas that need to be addressed are distinct and so are stacked rather than blended. The stack model highlights the dependence of a given layer on the layers below it.

Addressing a layer without having addressed the layers below will not generate the IT value optimisation intended.

This is a key point and a painful one.

There are no two ways about it. If for example the Strategy layer is not addressed then one is building on sand.

To take each layer from the bottom upwards:

Strategy Entwinement: To obtain real value from the IT investment, the IT strategy cannot simply be a response to the business strategy. The IT department needs to play a role in determining business strategy, and at times actually driving it.

Process Entwinement: The IT department needs to become a business process consultant. This will increase the chances of systems being built that actually support the needs of the business users.

People Entwinement: Users and technologists need to be on the same wavelength. For starters, technologists need to use a little less IT jargon. Users in turn need to learn a little more IT jargon.

Technology Management: Technology Management is where the ”rubber hits the road”. Without technology one can of course forget seeking value from IT. Given the inherent complexity of technology it can be considered an accident black spot, and if not managed carefully can lead to business failure.

Service Management: Many IT departments have put a service layer around the technology in order to protect the users from the associated complexity. The level of that service needs to be consistently high. Impressive technology with a poor service ultimately results in a disappointing user experience.

Circulation Management: The best IT systems in the world in respect of data processing will yield very little value if their outputs are not available to those that need them when and where they need them. Accessing organisational data, information, knowledge and even wisdom needs to be managed.

Value Management: Executives need to feel that they are receiving value from their IT investment. The CIO thus needs to be in a position to demonstrate this. There have been several attempts at value measurement, but there is a lingering sense that they are pseudo science, or at least inappropriate for IT value measurement.

The IT department/ industry must become a strategic partner (entwinement) rather than simply a well-behaved supplier (alignment). The cultural issues that separate users from technologists and the CIO from the boardroom need to be addressed if organisations are to leverage best value.

This blog is focused on getting the message out that IT is the responsibility of both the IT department and the users. Senior executives in particular must take responsibility for IT value maximization.