Does IT produce value? An interesting question but how do you define “value”? Webster defines value in the context of this blog as relative worth, utility, or importance for example “a good value at the price” or “the value of base stealing in baseball”. I especially like this second example, since it’s a good analogy for the value that IT produces within an organization.
In baseball, stealing a base increases the probability of scoring a run, which of course is the ultimate goal of the game. Within an organization in either the private or public sectors, IT increase the probability that mission, goals and objectives can be achieved with a minimum expenditure of resources. Like baseball, the distance between the runner and home plate is lessened, which means less is required to score. From second base a runner has a better probability of scoring on a single than he would have had from first base.
Like stealing a base, IT’s value is typically indirect and may or may not contribute to meeting an organizations goals. The value of stealing a base and not scoring is zero in terms of the score. In organizations, the value of IT is zero if it is not solving a problem or increasing the overall productivity of the organization.
There are numerous examples of failed ERP and CRM systems. Being late or costing more than expected are project failures. Not meeting user requirements and expectations go beyond being a project failure and are IT/System failures. If the system is never implemented, then the value of IT is negative and a waste of organizational resources. Being called out when stealing a base is often referred to as “losing a runner”, so the analogy still holds.
So what makes taking the risk of stealing a base worth the effort? It’s a close game and not a blowout, the value of scoring an additional run is high. This obvious translates directly to the competitive situation faced by an organization. It’s worth the risks of implementing new systems if they will help create a competitive differentiation or advantage.
The pitcher has a slow delivery, the catcher has a week arm and the probability of being successful in stealing the base is high. Our systems are old and outdated and the probability of successfully implementing new “state-of-the-art” technology is increased.
Our runner gets a great lead and has great speed. Probably the most critical factor in making the decision to steal a base and in IT probably the most important factor in determining the probability that IT adds value. The strength of our people!
It’s a fun thought and an interesting way of thinking about the value IT provides.