//It’s not about cost savings… it’s about value

It’s not about cost savings… it’s about value

The word ‘value’ has too many meanings and sometimes it masks a real problem. 

I had a conversation with a very smart customer recently, where their IT division is going through a transformation to help their business compete.  I asked if their transformation has the purpose of making IT cost less or increase business agility.  Their answer: It’s less about cost and more about value.

To me, an answer like that is vague.  It sounds good, but what kind of value is IT supposed to deliver? 

And that is the core question we should always ask of the business.  We shouldn’t be asking IT to deliver “generic” value.  We should be asking IT to deliver specific value, to make changes that will meet specific business goals.  And that requires that the business describe their strategies in terms of specific business goals.

Getting alignment to “generic value” is like having a teenager tell you that their room is clean.  Too many definitions of the word.

Alignment without specificity is not possible.

By |2011-03-01T10:57:59+00:00March 1st, 2011|Enterprise Architecture|5 Comments

About the Author:

President of Vanguard EA, an Enterprise Architecture consulting firm in Seattle focused on the Pacific coast of the US. Nick has over 30 years of professional experience in management, systems, and technology. He is the co-author of the influential paper "Perspectives on Enterprise Architecture" with Dr. Brian Cameron that effectively defined modern Enterprise Architecture practices, and he is frequent speaker at public gatherings on Enterprise Architecture and related topics. He coauthored a book on Visual Storytelling with Martin Sykes and Mark West titled "Stories That Move Mountains".

5 Comments

  1. gerold kathan March 2, 2011 at 4:30 am - Reply

    … so i am wondering – what is now a "specific" value ?  how is it quantified (both the generic and the specific) ? what could be an example of a specific value and its measurement…

  2. Jan van Til March 2, 2011 at 9:45 am - Reply

    Over time economies naturally develop. At the start people focus on goods (1); goods are the pivotal elements. People that posess or hold the keys to goods have (more) power. In the next developmental phase attention shift to people that posess or hold the keys to tranportation and/or transformation facilities for goods (2). Goods are stil important (we can’t do without), but lost their pivotal role. As development goes on attention shifts to people that posess or hold the keys to the information about transportation/transformation of goods (3). And right now we’re actioning in fullblown information society, a place where almost anyone can easily drown in information, attention shifts again: to value. Which information is truly valuable to pick in order to be able to effectively and efficiently transport/transform the right goods at the right time from/to the right places on earth (4).

    So… if an organisation develops from ‘level’ 3 to ‘level’ 4 – which is quite a (visionary) step – its information provisioning functions undoubtedly have to line up with that. Only valuable information will help this organisation to compete.

    Valuable information. What is valuable today can (and will) be outdated tomorrow. It’s contemporary dynamics, we are all faced with nowadays. We’re no longer able to foresee what information is of value. No one is. Business situations develop dynamically. The same goes for the accompanying information needs.

    IT is more and more required to deliver information of generic value in order to enable the business to combine specific information-of-value from it. IT needs to infrastructuralise information – make it available for general purpose. Business needs to be supplied with tools with which they combine general information/value (from information infrastructure) to specific value – time/place dependent. Do you (still) remember infOrch and Human Interoperability (http://www.slideshare.net/hjvantil)?

  3. Tom Graves March 3, 2011 at 12:35 am - Reply

    Agree that confusions about value (and particularly the frequent error of confusing cost or price with value) can make life for an enterprise-architect very hard. But to me one of the key tasks of the EA is to identify what 'value' _means_ in the enterprise – it's a key anchor to the whole architecture. In particular, start from value – _not_ solely from the IT…

  4. Mitch Sandlin April 26, 2011 at 1:01 pm - Reply

    I would humbly disagree with the statement that "Alignment without specificity is not possible.". I would restate as "Alignment without specificity is possible, just not useful."

    🙂

  5. NickMalik April 27, 2011 at 6:49 am - Reply

    @gerold: Specific value is value that supports a specific, measurable, business goal.  

    @Jan: I agree that IT must deliver the ability to compose information elements into valuable assets.  On the other hand, we cannot deliver the composability without measuring the value without at least one specific tie to measurable value.  The advantage of doing this: the first few compositions of information have a low ROI because of the cost of infrastructure development, but after that, the ROI skyrockets.  That's a good story to tell.

    @Tom: I completely agree… value is not only an IT question.  That said, IT must care about value.  EA typically lives in IT because IT is normally the only organization able to put up with us. 🙂

    @Mitch: LOL.  "Nonspecific alignment" is an oxymoron.  

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