A consortium of industry, consulting, not-for-profit and academic organisations has introduced into Europe a formalised approach it reckons will provide CIOs with a management roadmap to optimise the business value derived from IT investments.

The IT Capability Maturity Framework (IT-CMF) has built momentum over the past three years, during which time over 120 companies across Europe and the US are said to have engaged in its development. 

The framework was formally launched to US industry analysts in Silicon Valley in February of this year.

The body behind its development is the Intel-backed Innovation Value Institute (IVI) at the National University of Ireland, Maynooth. It describes its framework as way for organisations “to assess their IT maturity level, benchmark against industry peers and develop a clear roadmap for improvement, thereby reducing the complexity of choice for the CIO.”

IVI’s framework in effect codifies an IT capability maturity framework in which the effective management of the IT function within an organisation is focused on key pillars or strategies that cover IT budget management, IT capability, IT business value. The fourth addresses the need to manage IT like a business, shifting the focus from technology and production to a focus on customers and services

These four pillars align to an organisation’s overall business strategies and the business context it is operating within. 

IT-CMF uses generic maturity levels of ad hoc (or no processes), basic, intermediate, advanced and optimising, which have been inspired by the Capability Maturity Model used for software development, and covers 40 or so processes common to IT shops.

The idea is that business value can be derived in moving from ad hoc to repeatable processes that are well defined and well managed and which over time can be optimised, to drive incremental improvements. 

Peter O’Shea, company CIO at Ireland’s Electricity Supply Board, feels positive about the benefits of the framework. One of the founder members of the initiative, he says IT-CMF provides him with a number of IT management devices that are all to do with managing IT for business value.

O’Shea explained, “My line on IVI is that it helps me rationalise what’s happening in the business to provide me with a way of better shaping my strategy blueprint.” 

Over the past couple of years, O’Shea and his executive IT team have worked to apply the IVI framework in ways that would better inform internal thinking about how the CIO’s office should develop IT management by assessing maturity in all the key IT and business service disciplines. “The framework showed that we were quite mature in the way we handle budget management, which reflects the strong financial discipline across ESB. It also showed we need to focus more on benefits management and benefits realisation to drive fuller value from our investments.”

Measuring and delivering the business value of IT investment has become a key challenge for the CIO. Although IT is maturing as a business function, it still lacks some of the accepted methods found in other areas of the business that can be used to measure value. The outcome that is sought is business value, enabled by IT, rather than IT value per se. This makes it essential to establish a formal framework that can be used by both business and IT leaders to support value measurement.

The IT Capability Maturity Framework, other initiatives like the Cobit approved Val-IT scheme, and the broader use of project and portfolio management tools, are all supporting this move. 

Val IT is tightly integrated with Cobit, the collection of approved ‘best practice’ processes for IT governance. Specifically, Val IT focuses on the investment decision and the realisation of benefits, while Cobit focuses on the execution.

At ESB, O’Shea reckons his operation currently operates with a maturity level of two when it comes to the realisation of benefits. “With the IT-CMF, I now have a roadmap to show how we can move on up toward level three,” he said.

IVI now takes in more than 40 members, which include the likes of The Boston Consulting Group, Microsoft, Chevron, SAP, Northrop Grumman and British Petroleum, as well as ESB.