Every year, organizations spend 4-10% of their revenues on their IT organizations. Value is expected in return for these expenditures.
Here, value is defined as the financial benefit that an organization receives for expenditures. When measured, value can encompass an entire organization, or be constrained, such as to a single division or product line. Regardless, it must encompass those areas affected by the expenditure.
Value will be a point in time measurement comprised of:
- revenues per employee – gross revenues per employee
- employee satisfaction – how satisfied are the employees? After investing in employees, they become a substantial asset and competitive advantage.
- customer satisfaction – are the customers more or less satisfied than in the past? Finding a new customer is much more costly than satisfying current customers.
An organization can change value through:
- products and services that it sells and delivers.
- systems, both manual and automated, through which it delivers the products and services.
We focus on the latter. Continue reading...