By Luke Davenport
IBM Brand System Strategy
Earlier this year, Michael Porter and Mark Kramer published an article in the Harvard Business Review called Creating Shared Value. The article describes the need for businesses to create economic value that also creates value for society. That’s an idea that’s implied in IBM’s Smarter Planet agenda. But, as a practical matter, are business leaders incorporating this thinking into the way they evaluate investments? What about for IT investments specifically? Should they be? And, if yes, how?
IBM asked Forrester Research to examine how business leaders can create additional value beyond operational efficiencies and cost savings through their investments in information technology. We focused on social engagement, gaining strategic advantage and brand enhancement. The study is now complete.
Now we’re presenting the results in a Webinar, Not Your Father’s Total Cost of Ownership: Creating and Measuring the Expanded Value of IT, Thursday, Oct. 27, at 11 a.m. In the webinar, we’ll present additional perspectives on value from Steve Rogers of IBM’s Center for Applied Insights, and Dr. Andrew Watson, Director of the Center for Connected Medicine.
It’s open to anybody who wants to participate. Register here.
Forrester wanted to find out if business and IT leaders are taking a broader view of the value they create with IT. It found that 87% of best-in-class organizations factor in long term, intangible value into the business case, compared to 62% of non-best in class organizations.
Best-in-class organizations evaluate a wider scope of value enabled from transformational technology investments, evaluating the impact qualitatively or, in some cases, quantitatively. They tie a higher percentage of their IT spend to helping make strategic shifts, for example.
So what should leaders do? Forrester has some recommendations to get started:
Brand: Take a system view. Map how brand affects the bottom line then determine what drives brand value and which drivers are activated by technology.
Strategic: Create a value chain that links strategy objectives to measurable outcomes, then determine where drivers of those outcomes can be activated by technology.
Societal: Build a list of external groups that have the potential of being impacted by investments in technology.
We think this is just the beginning of a long-term shift in the way organizations measure the effect of their IT investments. Who’s up for the challenge?
For more information about new ways to evaluate value creation through IT investments, see these resources from IBM’s Center for Applied Insights