Last week we talked about how everything is measurable and it is necessary for organizations to measure the value of IT so that the entire organization sees the importance of IT. This author of this article speaks with Doug Laney, research vice president for Gartner Inc., who says there is a gap between the realized and potential value of information. Laney gives his six models for how businesses can treat data as an asset in order to help close that gap.
1. Intrinsic value of information – breaks data into characteristics such as accuracy, accessibility, completeness, then rates each characteristic and tallies for final score.
2. Business value of information – measures data characteristics in relation to business processes.
3. Performance value of information – measures data impact on key performance indicators over time.
4. Cost value of information – measures the cost of “acquiring or replacing lost information” as well as lost revenue caused by loss of data
5. Economic value of information – measures how data contributes to revenue
6. Market value of information – measures the revenue generated by “selling, renting or bartering” corporate data.
Do you agree with the methods Laney suggests? Are their other ways you would measure the value of data? Which methods do you think would be most effective at convincing your CEO that data is an asset to your company?
This week we’ve had interesting discussions on gauging the value of IT. While I was researching ways to measure the value IT brings to the table, I stumbled upon this article. According to InformationWeek.com, there are 5 ways to measure the value of IT.
- Create metrics where IT influences mission outcomes. Work with key stakeholders whose processes are impacted from the IT investment.
- Develop metrics that measure IT project outcomes on multiple dimensions. Link the metrics with the organization’s strategic objectives.
- Collect good baseline data on measures. Make sure the data that is collected is valid and reliable. The data should include normal operating conditions as well as operations under stress.
- Use dashboard communications. By communicating metrics to stakeholders through the use of dashboards, it lessens the likelihood that the reports will be overlooked. Traditional email reports are often times ignored.
- Share your experiences building metrics and evaluation programs with other CIOs. It gives you the chance to learn what works well and what doesn’t.
Do you agree or disagree with the 5 ways to measure IT? What are some other ways IT can be measured?