If an organization seriously considers adding value to the IT function, substantial benefits for both the organization and the IT department can be produced. The issues involved may require considering new, more innovative approaches to the IT department's mission. Areas for review and improvement include the ways in which technology is being selected and used and improvements in the levels of IT customer service.

HERE IS A QUESTION THAT EVERYONE who works in an information technology (IT) department should ask from time to time. The question is "What are we doing within IT to add value to the products and services we deliver to our customers?" The answer, depending upon the current level of IT performance within an organization, can cover a lot of ground.

The topic should be considered in terms of its application to business, rather than to technical issues. Framing the issue in that way does not imply that technology has no part in bringing increased value to the organization; rather, technology is the catalyst used to deliver that added value. The primary purpose of technology within a business setting is to serve the business. Where technology is leveraged to support a continuing process of adding value to the business of the organization, the IT department is doing its job. Where the push is focused on bringing in new technology to see what it might provide, or to accommodate the interests of people in IT, the department should be seen as failing the organization.

As an example, the IT department might consider movement to a new, exciting programming language as a sound technology choice. From the technical view, moving to this new technology makes a great deal of sense; however, the salient question should center on what, if any, real value the new language will bring to the business. Staying with introduction of a new programming language, some reasonable business-based questions might be asked. Will the new technology:

Some additional technology-related questions would include:

If the business rationale for moving to a new programming language can only be expressed in vague business terms or is heavily skewed toward the technical benefits, the organization should seriously consider whether it will add business value. After all, there are many examples whereby a new technology was installed, but never effectively used. Sometimes, the organization found out too late that, while the particular technology may be very good, it cannot be accommodated to the organization's business needs.

It is an IT mistake to give in to euphoria about a new software or technology approach without a firm understanding of its business value. Unfortunately, when such a mistake is made, the ramifications are usually felt beyond the borders of the IT department. Since the issue transcends whether or not to move to the latest programming panacea, hard, business-oriented questions must be posed and adequately answered for every technology-based request for new funding. Therefore, the organization must have a process that subjects every request for new technology to a rigorous examination of its business value.

Of course, an argument can be raised that some level of funding should be available to the IT department for use in working with emerging technologies to determine whether they have a place in the organization. That argument is valid, but it should be seen for what it is, a process that may or may not yield any practical benefit. There should be a distinction between investing in technology to see if it has value for the organization and proposing an investment in technology under the guise that it will add benefit when no one knows that to be the case.

IT installations are usually pressured in two areas. One is to deliver new IT applications, and the other is to maintain and enhance existing applications in the production environment that is currently supporting the organization's business needs. Paying attention to those items usually consumes all of the time of the IT staff members. As a consequence, little time or attention is paid to the topic of the current level of actual value the IT department is delivering to its customers or to how that level can be increased.

Many of the instances of increased IT value come about as the result of the completion of a new set of IT applications. Sometimes value is added through the introduction of changes to applications in the existing IT applications portfolio or within the production processing procedures. Although adding value under those circumstances is beneficial, there are some downsides that need to be acknowledged.

While developing new IT systems can produce considerable added value, realizing these benefits usually takes considerable time and money. Taken on a pure return on investment basis, it may be difficult to justify the resources invested in a particular project based upon the actual value returned. Worse yet, in the case of less than successful or failed projects, the loss can be substantial.

Making value-adding changes to existing applications or to the production environment are often achieved as much by happenstance as by design. Too often, those benefits are the result of the correction of some coding or production problem, rather than a concerted effort to make improvements in the value of the code or processes involved. While every IT department should accept every addition to the value of its services, no matter where that value may originate, well-managed installations will strive not to limit themselves to a hit or miss approach to the issue. Every member of the IT department should be consistently alert to opportunities to produce increased value from the function. A valid approach to the issue is to consider it as a baseline process, in that an understanding should be reached about the current level of IT value within the organization and, once determined, the goal should be to continually raise that baseline.

Within the context of the management implications, the topic of adding value should be viewed as both a tactical and a strategic issue for the IT department. Adding value is tactical in that bringing additional value has an immediate positive effect on the deliverables provided by the IT department. The strategic value comes in understanding the requirement that the IT department must maintain a position of constantly working to raise the performance bar as it relates to its delivery of goods and services. IT installations that do not consistently strive to improve are, de facto, falling behind. One way to consider the topic of adding IT value is to understand the axiom that, with regard to the work of the IT department, the issue is not, "What have you done for us lately," rather, it is, "What are you going to do for us tomorrow?" Any IT department that is content to maintain the status quo with regard to the value it brings to the organization is failing to meet its business obligations. Given the pressure from outside the organization by many vendors to provide IT goods and services, falling behind opens the door for someone to come in and take away the IT department's business.

IT has two sets of customers whose needs must be recognized when adding IT value. The first set is internal customers, i.e., that is, members of the various business units served by IT. To a large extent, the needs of these customers will not change dramatically. The emphasis here must be on the delivery of sound business applications that meet those customers needs. In addition, ways should be found to improve those business applications on a continuing basis. Beyond internal customers, IT must improve the value of its goods and services as they pertain to the organization's external customers. In many instances there is a direct connection between IT and the external customers; Internet processing presents one example. As Internet processing grows, the IT external customer connection will grow.

With the Internet, one view of the organization by its external customers will be based upon the technology that provides a path into the organization. Within that view, the IT department must become and remain aware of two Internet realities. First, the technology used to access the organization, and to provide customers with the information they require to conduct business transactions, must be of the highest possible quality. If the Internet material presented to the customer is vague or complex, customers will stop doing business with the organization. The goal of the Internet is, after all, to provide rapid, easy access to the products and services that the organization offers. Providing a technically elegant Internet Web site that fails to meet customer needs may attract many potential customers, but it is not likely to retain them. This exemplifies why the IT focus should be on business, rather than on technical issues.

The second Internet reality relates to how an organization's Web site compares to those of its competitors. Given the wide range of business options available on the Internet, both potential and existing customers are inclined and encouraged to shop around. That freedom to move about the Internet encourages comparisons between Internet locations. An organization that offers a more attractive, more easily used Web site is likely to attract and retain new customers. IT departments must be positioned to review the Internet offerings of competitors and, where appropriate, be prepared to add value to their own Internet offerings.

The main goal of the IT department must be to satisfy the needs of both groups of customers and bring on a steady stream of improvements in IT performance. Beyond the professional aspect of doing the very best possible job for the organization, the members of the IT department should also recognize the self-interest associated with adopting a value-added approach to their work. They should bear in mind that Internet growth offers organizations an increasing variety of IT-based options. Those options are by no means limited to doing the IT work within the organization.

One example of the expanding Internet options can be found in the growing popularity of applications service providers (ASPs). When it comes to providing IT value to the organization and its external customers, some ASPs can bring considerable added value. So the internal IT department is making a strategic mistake if it fails to understand that the ASP will in some cases be in direct competition for the same work and the same set of customers.

Continuing improvements in the quality of the goods and services delivered by the IT department coupled with associated improvements in the speed with which those deliveries are made are valid issues on which to judge IT performance. Although that judgment process may be seen as unfair within the IT department, particularly in the light of the existing heavy demands placed upon the department, it is going to become an increasing reality in many IT installations.

In adding value to the IT function, the tactical approach brings about improvements in the current set of products and services delivered by the IT department. The strategic approach adds new IT value. Both approaches present opportunities for both the IT department and the organization. Making even small improvements, if they are continual, not only adds value, but also improves the image of the IT department. Is improving that image important? The answer will always be yes! Every IT installation, no matter how solid its reputation, can always benefit from image improvements; you can never be too good. Beyond that, consistent improvement of the department's image will build and store good will over time which can be drawn on when things take a turn for the worse. It can be a great comfort to have friends when things get sticky -- and they will sooner or later in every IT installation. Since both the tactical and the strategic aspects of the IT effort are important and need continuing consideration, it is important to understand how they can be developed and managed, and how they can benefit the organization.

The place to begin adding tactical value to IT is by determining how day-to-day IT department work can be improved. Areas to be considered include the existing applications portfolio and the ancillary services the department provides to the organization. Work in this area establishes a baseline of the current level of IT value. Once a baseline has been established, planning can be directed toward making improvements. Developing the baseline should not be viewed as a negative reflection on the IT department. Instead, it should be seen as a starting point from which to assess the current value of the work of IT and to provide a forum to begin the process of improving the levels of that value.

Seeing the current level of value of IT's products and services should not be restricted to the IT department, but should also include the business units that the department serves. There is often a difference of opinion between the way IT views customer satisfaction and how those customers feel about the work of the IT department. Therefore, it is important to obtain a sufficiently broad view of the current level of customer satisfaction to ensure the accuracy of the assumptions used as the basis for adding value. Given the increasing importance of dealing with external customers, it would be helpful to include some of these customers in developing the value baseline.

One way to assess the value of IT goods and services is to conduct a customer survey, asking for candid comments about dealings with IT and suggestions for improvement. It should be understood that adding IT value is more than improving the department's technical offerings. The ways in which the people within the department respond to questions and requests from customers should be seen as one component of the value baseline.

If the IT department managers conclude that conducting a survey of internal customers is a good idea, they must be prepared to accept the consequences. Survey responses may highlight negative feelings regarding IT work. If this is the case, IT managers shouldn't become defensive, although this will be difficult. It is not productive to ask for candid answers regarding the level of IT service and then argue about their validity. Fair or not, the opinions of internal customers represent problems that must be addressed. In the eyes of these customers, perception is reality, so it is in the best interest of IT to attempt to carry out the improvements requested to the extent possible.

In using an IT customer survey, the organization should consider obtaining outside assistance in developing the questions to be asked. There is an art to framing the questions in such a way as to obtain candid answers. If the survey is done within the IT department, it is likely that the questions and the way they are presented will be skewed toward obtaining answers that are more favorable to the department than may really be the case.

Using an internal customer survey addresses two value-added issues: (1) it can be used to form the basis for developing the IT performance baseline, and (2) the material generated from the survey can be used to develop an improvement plan for moving to a more value-added function. There is an ancillary aspect to the survey, in that developing it and sending it out to internal customers will have a positive public relations connotation. In many organizations, an effort on the part of IT to address and improve the value of its services, particularly based upon the needs of internal customers, will come as a welcome surprise.

The IT department managers must also think about how the department can bring longer-term additional value to the business units being served, as well as the entire organization. Thinking strategically will require assistance from the business areas, as well as from the organization's senior managers. It is critical that the strategic approach focus on bringing added business value through the use of technology and different approaches to the work of IT.

Some of the opportunities for IT to add strategic value include:

-- Developing IT applications that make it easier for customers to deal with the organization.

-- Considering approaches that, through the use of Internet technology, can be used to expand the range of goods and services being offered to the organization's customers.

-- Exploring the possibility of moving to an ASP partnership as an approach to improve overall customer service and allow the IT department to focus on other, more productive areas.

If an organization seriously considers adding value to the IT function, it can produce substantial benefits for both the organization and the IT department. The issues involved may require considering new, more innovative approaches to the IT department's mission. Areas for review and improvement include the ways in which technology is being selected and used and improvements in the levels of IT customer service. Opportunities for adding IT value abound in every organization. Making the effort to recognize the benefits to be obtained from producing that value on a continuing basis requires the development of appropriate plans and processes. IT department managers must be willing to accept responsibility for installing these plans and processes, as well as providing the support needed for their eventual success. All the members of the IT department must become more interested in adding value, both for IT self-interest and for the business implications. Complacency is unjustified, whereby the IT department feels that its customers have nowhere else to go and that whatever they have been given in the past will suffice in the future. If change to consistently higher levels of IT value does not occur through the efforts of the IT department, it may originate outside the department. It is better for the IT department to act aggressively to foster the needed changes, not only for the IT department, but for the entire organization.