COBIT provides a framework for the management and delivery of IT services, whereas Val IT (Enterprise Value: Governance of IT Investments) offers the means to measure, monitor, and improve the value gained from IT investments. Val IT complements COBIT from a business and financial perspective where COBIT is a framework for the means of creating value. Val IT now provides guidance on meeting the end.
Val IT recommends that IT-enabled projects are managed as a portfolio of investments, focused on business value, and supervised through their economic lifecycle. The initiative is also designed to meet the demand for guidelines to assist management to attain an appropriate Return On Investment (ROI) for IT investments. The first phase of the guidelines consists of a framework, taking up the use of the business case, and a case study from the financial services company ING.
The framework has three main processes: Value Governance, where the objectives are to optimize value; Portfolio Management, which aims to make sure all IT-enabled investments match and contribute to the organization’s value drivers; and Investment Management, with the goal of delivering the best value at lowest cost and risk.
It is important to identify those initiatives that bring the maximum value to the organization, and, as ‘Change the Organization’ spend is limited, it is critical that investment is made in projects that will make the best use of limited financial and human resources. Value governance allows both the identification of opportunities to provide IT value, and processes to monitor progress in achieving IT value appreciation.
By putting in place Portfolio Management it is possible to review, budget for, initiate, and track the project through its entire lifecycle from an organization’s perspective. When senior executives ask searching questions on the value of IT, it becomes possible to provide them with meaningful answers that are backed up by hard data. Furthermore, Portfolio Management can provide multiple business, financial, and technology views of both individual projects and the entire portfolio, assisting with the process of optimizing IT resources.
Both IT and enterprise executives require an overall measure of the efficiency and value of the IT function. Deploying Investment Management, and adopting a formal methodology to manage the associated processes, is the single most effective step that an organization can take to improve the accuracy and validity of its IT investment strategy. The key to understanding value is to develop business metrics for all IT-enabled projects, with data collected and analyzed over the entire project lifecycle, which are linked to business objectives and performance metrics.
It is the responsibility of senior management to ensure investments in IT-enabled projects provide the expected returns and add value. Val IT makes a significant contribution in this regard, as long as the guidelines are not used prescriptively, but applied intelligently to meet the specific requirements of each organization.
Source: OpinionWire by Butler Group (www.butlergroup.com)
