In today’s society, the value of something is highly prized and must be carefully quantified in order to ensure its continued use. Yet, in spite of this, some areas often seem to deny quantification, such as the value of IT. As a result of this mentality, and due to the increasing pressures on businesses, both internal and external, it is no surprise that “IT departments and CIOs are under pressure” to show that their departments are performing. Due to such pressures, it has become necessary to show the ways that the IT department delivers value to a business, a task that may seem daunting to those who have never had to engage in the same previously. Key components of IT value include the reassessing and aligning of IT strategy with goals of the business; management of IT project portfolios, ensuring that the IT department is as functional as possible; appropriately mapping the business architecture; ensuring necessary governance is in place; and system integrations and updates to ensure the smooth running of other departments. In order to increase the value creation afforded by IT, however, a complex analysis of the current business structure is a necessity, and a high level of interaction between departments must be present, ensuring that the IT department is able to anticipate the needs of other departments to increase overall efficiencies. In the case study, Maggie and Reuben both had unique ways of determining the value created by IT, however it was Maggie’s proofs in the form of articles and studies completed that served to provide a necessary perspective shift, one that is vital to continuing to boost the success of the IT world.
IT creates and enables the creation of value within an organization through the provision of the infrastructure necessary to ensure that the company has what it needs to succeed. IT is, in today’s technological world, the backbone of the company, and failure to invest in the same can mean the failure of the business. The valuation of IT capabilities necessary to keep a firm in business but which do not provide competitive advantage should be reviewed as separate from other value afforded to the company, looking instead at the difference between how the company would function if such a component were not present. When the benefit is greater, or when upgrading affords a greater benefit than the current system, the upgrade should be considered of a high value and the company should move forward. In terms of the consultant’s export mentioned in the case study, it relates to Barton’s selection as CIO due to the fact that the company was able to see that his predecessor’s style was not working; attempts were made to address the matter, but when those failed, the company saw the value in moving forward with a new individual, thus allowing Barton to be hired (Austin et al. 2009). Such is the same principle that should apply to addressing all IT concerns: Can it be fixed? Is it cheaper to fix than to upgrade? If yes, implement the fix. If it still does not show progress; upgrade.
Amazon recently implemented one-hour delivery in several major cities. While this may not at first seem like an IT decision, Amazon, like most companies, has been aware of the increasing failures of the post office to deliver mail on time, a disconcerting fact considering their contract with USPS. This logistical nightmare has resulted in a high level of traffic to Amazon’s site, increased complaints, and required far more manpower in chat and on the Amazon portal to be able to address such concerns. In order to work to reduce the load to the site and optimize delivery infrastructures, Amazon opted to provide one-hour delivery to those in certain major cities, for a price. Customers are guaranteed to get their items within the delivery window, increasing traffic to the site, increasing the value received, and making customers more likely to purchase Prime, which offers a discount on these deliveries. The company is gaining business in these areas, as opposed to losing it, and customers have peace of mind knowing that their items will be delivered, thus causing them to order more, making the system a good investment, in spite of the potential logistical issues with coding the delivery driver routes and deliveries and integrating them with the primary system. Refund demands are down, and shipping costs are likewise down, creating still further value for Amazon, in spite of the need to pay additional drivers. The systems cost is easily justified, and the value for the money speaks for itself. This has been a steady complaint of postal customers for the better part of a year, almost since Amazon made the deal with the post office. Executives would have seen this as a redeeming feature, a way to recoup from the bad decision to attempt to save the post office after its infrastructure had already been gutted. For future IT investments, Amazon would be better served in asking what customers would like to see first, before taking altruistic actions.