The Value of IT

It's difficult to undermine the positive impact and value that a strong IT department can provide to companies. Companies of all shapes and sizes can attest to the latter statement; from locally-owned and operated small-and-medium sized businesses, to massive corporations, the benefits and value of IT are glaring and continue to increase with the rapid adoption rate of new technologies, especially in the mobile sector. The statement of "IT doesn't matter" in our course notes made me wince and shake my head in disgust; the fact that the statement was made after the dot-com bubble of 1997 to 2000 is astonishing. But, I believe Carr has been clobbered by his colleagues enough so I'll skip the rebuttal and go straight to a discussion on this lesson.

Although most are in agreement that IT provides value to businesses from all industries, both mature and young, finding a way to quantitatively measure this value is often difficult (McKeen, J. D., & Smith, H. A., 2012). More mature companies, often using old and outdated software, are required to plug a substantial amount of money into developing new technologies to make the company run more efficiently and compete with new strategies in the industry. Improved efficiency can directly corelate to reduced costs, or better profit margins. However, ineffective planning and allocation of IT resources can also be detrimental to a business (McKeen, J. D., & Smith, H. A., 2012).

Take for example, using one of your most adept Java programmers and had him doing data entry; this is an apparent misuse of human resources and does not provide the potential value to the business that it should. Or, having skilled IT workers spend two hours a day assembling ethernet cables; again, another gross overuse of human and talent on a task that would most likely be better suited to be outsourced. Effectively, the ability of a CIO and other IT managers to allocate their skilled resources to the appropriate projects and tasks will indefinitely determine how much value they can provide to the business through their IT department (McKeen, J. D., & Smith, H. A., 2012). 

When IT resources and planning is effective and in line with an organization's goals and mission, significant value can be provided to the organization. These benefits and the value they provide to the business and customer could represent, although sometimes small, significant meaning to the company's overall success and business strategies. For example, for a small dog grooming business, better social media presence could mean 40 or 50 new patrons each month, whereas a massive chain like Wal-Mart has a point of sale and inventory tracking system that is the best in the business and provides them with a competitive edge that allows them to sell products at the lowest price while remaining profitable.

I think that it is fair to say that a business simply cannot compete in Today's World without at least showing some sort of presence online. And, on a global level, a firm's IT department and their ability to work in unison with other departments within an organization is paramount to success. Appropriate collaboration between departments can help to limit the probability of IT projects lacking the vision for customer service that the sales department had in mind. There are several examples where collaboration will prove to help an organization provide more customer value, the point here is that IT workers are not necessarily marketers, salespeople, human resource managers, or customers for that matter. The point that I am trying to make is that IT workers have specific skills and traits that their counterparts in marketing, sales, management, and human resources do not possess, and vise-versa; effective collaboration between departments is essential to be as efficient and effective as possible.

Be careful how you measure the success of the IT department for your organization. Some firms may spend very little, with great returns in the beginning, followed by a loss on a significant investment in IT the next year, only to see five years later that the initial investment ended up provided substantial returns for several years to come. The moral of the story is that we mustn't give up too soon on projects that are seemingly expensive and lack business value in the beginning of their implementation, because you never know when the right idea, manager, CIO, or a combination of thereof make slight changes that result in significant returns in the form of increased market share, new market penetration, or cost savings from improved efficiency, just to name a few. Some IT investments take years to realize their potential, and good programming and project management can take time, but with the right people, vision, and ideas, success might be around the next "quarter".

Austin, R. D., Nolan, R. L., & O'Donnell, S. (2009). The adventures of an IT leader. Boston, MA: Harvard Business Press.

McKeen, J. D., & Smith, H. A. (2012). IT strategy: Issues and practices. Boston: Prentice Hall.