IT solutions can’t be measured, or at least, it’s hard. Not my statement, but something I hear very frequently. This is, by default, not the problem we’re facing here. It’s the logical outcome of looking at the different things. We should not be focusing on measuring the outcome of the IT project, the thing we need to measure is the value gained by it. In other words, the problem. Some very relevant terms come to mind, ROI, TCO etcetera, but how do we keep focus on these element during our project? And how to steer on them?
Money is one of the simplest ways to manage a project. Because it’s such a universal language. The problem here, however, is that it’s pretty tough to measure the preferred outcome when we’re looking at the solution we’re building. But this is (for the ones who know me longer than today) a completely wrong way of looking at projects in the first place.
In IT projects we’re building a solution to a business problem, or a business challenge for that matter. These are always measurable. (In other words, if this is not the case, we probable don’t have a problem after all and we’re done.) The measurement can be pretty complex, but certainly not impossible. Look at a few variables, including labor costs, estimated loss of business, transport costs, maintenance and management. The costs are, however, always part of the problem we trying to solve.
And here forth comes value. Value, within Software Development projects, can be the only real measurable. Looking at return on invest, ROI, this is what we’re trying to do. Costs and Value can be checked off during the project and the ROI can be a good measurement for choices that need to be made.
In the book “The IT Payoff: Measuring the Business Value of Information Technology Investments” that Sarv Devaraj and Rajiv Kohli wrote in 2002, there’s a complete step-by-step methodology to assess the value of IT investments. This book lays out the basics for the modern information analysis and CIO / CTO. Devaraj and Kohli work on a basic assumption (which I believe to be correct) that the technological decisions are not in the IT department, but a joined effort and therefore joined responsibility.
When steered on value, IT projects can become much more clear where decisions are made and what type of effort is needed in order to make it a success in the organization. This also means that we actually can start making projects smaller and more efficient, because we own and share the insight where the largest profits are to be gained.
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