Mark McDonald

“I will gladly pay you Tuesday for a hamburger today.”  J. Wellington Wimpy.  The quote may be unfamiliar to people who have not seen the Popeye cartoons.  The quote may seem unfair as a way to describe the business/IT relationship regarding benefits realization, but the ethos behind it illustrates the need to change attitudes toward benefits realization.

That ethos involves IT getting investment budget to build new systems with little direct involvement or commitment for generating the returns on that investment. There can be no greater separation that puts both sides at odds with each other.

Traditionally benefits realization is the responsibility of the business with IT responsible for enabling those benefits through technology solutions.

This type of relationship worked when IT solutions moved the enterprise from manual to automated processes from the back office through the front office.  IN these cases, the value potential of automation was so great, that benefits realization was less of an issue.

Unfortunately as IT solutions cover more processes, the opportunity zone between benefit potential and investment level has narrowed adding new stress to the benefits realization equation and widening the gap between the business and IT.

In the face of this gap, executives have sought to add more process overhead to an already weak process.  Management overhead practices include:

• Incorporating complex financial based measures when calculating IT investment returns and decisions.

• Engaging in costly and time-consuming change management activities to sell the business on the new solution

• Implementing new scorecards and management metrics in order to concentrate management attention.

Closing the benefits realization gap requires sharing rather than shifting responsibilities for investment, solution and benefits realization activities.  Here are a few points to consider:

• Benefits realization starts with defining a realistic business case that becomes the future management operating model rather than an instrument that is abandoned after the investment decision.

• Concentrating the on quantifiable changes in operational performance rather than achievement of qualitative strategic initiatives.  If you can declare victory without the data to show success, then you are managing.

• Recalibrating business applications of technology on clearly defined business problems or opportunities in order to leverage existing assets as the days of ‘rip and replace’ are fading.

• Incorporating IT into daily management and improvement disciplines to create continuous change rather than requiring the enterprise to lurch from strategic initiative to initiative.

Benefits realization is perhaps one of the more complex and far-reaching areas separating the business from IT.  Existing business case and benefits realization models are losing their effectiveness and need to be replaced – more on those models in latter posts.

CIOs and business executives need to share benefits for business results else they will continue to ask if they can pay you tomorrow for the business case today rather than having IT be the spinach for business performance.

This is part of a series on the ways in which IT separates itself from the rest of the enterprise.  The first/keystone post can be found at this link

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Category: 2010 CIO Economy Leadership     Tags: 2010, Economy, IT and Business, IT Leadership, IT management

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