TABLE OF CONTENTS In this chapter we will cover the added business value of IT and describe many ways and techniques that can be used to quantify and measure this business value.
We will start with an explanation of the context of IT value, which of course has an impact on the things to measure and the ways to measure them.
After explaining the different contexts, we will describe ways to quantify value. We will do this by narrowing the scope, starting from the value of a company to the value of an individual IT investment proposal. Halfway along this track, the ways of using scorecards to measure the added value of IT departments will be discussed.
We need to keep in mind, though, that although the value of IT can be measured in many ways, value itself is subject to the perception of the individual observer. This perception may be false, blurred and irrational; in real life, one has to deal with it. The good work of many people working in the IT department delivering high quality service to all business units can become spoiled in one hour, when a single computer virus damages part of the email file of the CEO.
What is the business value of a company? The answers is, of course, it depends .
For shareholders, the business value of a company equals the current stock price, multiplied by the number of stocks outstanding. This shareholders value is an important indicator for public-owned...
