Lightning in a Bottle

Without the proper metrics in place, IT validation is meaningless

A thousand years ago, medieval scholars made it their pastime to debate how many angels could dance on the head of a pin. In 2001, corporate officers spend hours in meetings to debate the business valuation of analytic applications, e-business middleware, and B2B technology initiatives.

What do they have in common? Both groups have shared the futility of engaging in a debate without context or boundaries. In other words, they lack a vocabulary of success, without which success is impossible.

Valuation methodologies, such as balanced scorecards and economic value added, have been abundantly available to business decision makers for years. However, successfully mapping these traditional techniques to complex IT projects is difficult, and when you factor in the common cultural mismatch between financial and IT organizations (the lack of a shared "language" is endemic), nearly impossible. Consequently, benchmarking the value of IT systems, particularly high-value ones, is often a process in which well-meaning professionals trade bromides in place of meaningful information. (A recent Dilbert illustrates this situation beautifully. Upon being instructed by his boss to "do more with less," a beleaguered employee proposes that the company "work smarter while broadening our focus" - and is reminded that his suggestion "doesn't mean anything." "Excuse my leadership," retorts the employee.)

LET THERE BE LIGHT

Intelligent Enterprise has been vigorously addressing this issue from various perspectives recently. For example, I hope you've been following contributing editor Erik Thomsen's important "Information Impact" series (look for the final installment in the Aug. 31 issue), in which he proposes a new technique for benchmarking the business value of analytic systems.

In our current cover story ("B2B: The Real World"), Darius Vaskelis of e-business consultancy Inforte Corp. addresses a related issue: the valuation of B2B technology initiatives. According to Vaskelis, the inherent complexity of B2B projects - they usually span multiple business functions, involve multiple implementation phases, and enable new, often unrecognized, revenue opportunities - makes traditional valuation measures infeasible. Rather, Vaskelis proposes a new methodology called B2B value assessment, or BVA, in which such projects can be assessed both quantitatively and qualitatively, and of a piece: as coherent, long-term strategies.

Tulu Tanrikorur, technology VP at New York-based Diversified Investment Advisors, addresses a broader but no less important problem ("Great Expectations"). In Tanrikorur's experience, too many businesses deploy Internet technology infrastructure without developing a long-term technology direction - or "policy," as it were - first. (It amazes me that any company would make such a large investment in an ad hoc manner, but each of us has personal experience in that department, I'm sure.) Consequently, these deployments usually exacerbate the "data silo" problem that characterizes most medium-to-large enterprises, rather than relieve them. In fact, claims the author, many companies never even take the rudimentary step of analyzing the technology initiative's ability to solve the business problems at hand. In this story, Tanrikorur outlines an approach for managing these "risks" (with a second installment to appear in our Aug. 31 issue) successfully.

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Finally, data warehousing expert Mark Riggle, formerly a researcher at SAS Institute's Data Warehouse Technologies Research Center, proposes a methodology ("Breaking the Cycle of Failure") based on business process models that can circumvent the leading cause of project failures: flawed requirements analysis. Again, with proper planning, there is no problem can't be solved (or even better, avoided altogether).

TRUST AND TEAMWORK

Ralph Waldo Emerson wrote that "Self-trust is the first secret of success." Until more business and IT professionals begin to use the measures that make mutual trust possible within their organizations, success will be fleeting.