How does IT add value to a business? How to measure the value? These are the questions that businesses have to ask themselves when they are investing in IT. There are no standard methods that have been developed to assess the value that IT gives to businesses, so businesses have a difficult time answering these questions.

In the article “It Doesn’t Matter”, the author Nicolas Carr states that IT does not bring value to the firm because technology is becoming cheaper and is available to the firm’s competitors. Mr. Carr goes on to say that more IT companies are becoming suppliers of IT applications with cloud base technology being, there is no advantage for any one firm as these IT companies provide the same services to the firms competitors. There is some truth to this as technology is becoming cheaper and technology is available but I believe for an organization to get value from their procurement IT they must have great support from the organization as whole. They must have in place key individuals that can use the new technology to provide value for the organization.

IT value is assessed differently by different managers, some look at what cost savings IT bring others look at the improved productivity with IT, ultimately measurement of IT value should support the business model and show how IT has enhanced the way the organization does business (McKeen and Smith). To recognize possible value, the organization must stop looking at individual business units and take an enterprise level approach. They must also put potential IT projects into portfolios and decide on which are worth the time and investment. An organization’s business strategy is very significant to getting value from IT. Having the business strategy that looks at what IT can implement, and having IT management understand the business strategy to align their own strategy with the business will provide a better approach to increasing IT value. In developing a strategy, the organization must have the suitable people involved in regards to IT procurement and provide decisions that are beneficial for the business. Having senior management involved in this process increases the business value (Mckeen and Smith).

Organizations understand that IT by itself cannot provide value. The interaction with the people using IT and the information being used also plays an immense part in adding value.  To measure business and IT value, organizations are creating business metrics. Using a metrics helps organizations to measure business performances.  Organizations have enticed getting employees to participate in using the metrics by providing incentives in the form of bonuses.  Setting goals for departments and individuals has increased business performance. Providing a reason to participate in this program has gotten IT personal to take more accountability for business performances.

Businesses and their IT departments are working more closely together to provide the optimal value for both the business and IT.  Both sides have recognized that to add value they must understand each other’s strategies and align them so that they do not work against each other but instead provide increased performance, that can translate into investments in IT adding value at a enterprise level.