IT Value Realization

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1

Agenda
 Introduction
 What is IT Value Management?
 Understand Strategy Alignment
 What is IT Governance in the context strategy?
 IT governance = IT Value Realization
 What is benefit approach of IT value?
 Financial based parameters to assess IT investment benefits
 Non - financial Benefits value realization in public sector
 Components of strategy alignment and IT value management
 IT Strategy in public sector
 The council’s strategic priorities in e-government
 Quality of IT value realization management in local
government
 What are Factors that reduce alignment in public sector?
 Core benefits of public sector in IT value realization
 How to measure public value IT frameworks PVIT“BENEFITS
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Introduction
1. “Public value as public sector equivalent to shareholders value”
Public value benefits can be defined social benefits of corporate
activity which are hard to value in monetary terms such public
policy, service improvements and effectiveness/ efficiencies.
E-procurement and e-governance are typical approach used in
public sector
Government using e-procurement to satisfying requirements for
goods, works, systems, and services in timely manner while by e-
governance has to met transparency, accountability, and
integrity of the social/community
 E-procurement in public sector consists and focus in three areas
such as
 1. Organisation and Management
 2. Practices and process
 3. systems and technology
9.

What is value management?

 Managing the IT budget to deliver better
performance and value
 Managing the IT capability in core process
areas
 Managing IT for business value by tying IT
investments to business benefits
 Managing IT like a business by focusing on
end users and services versus technology


4

 IT strategy
 Corporate Activities framework
 ITPM framework Assessment Model
Project Management Book of Knowledge (PMBOK) and PRINCE 2

 IT
governance framework for management of IT
activities:
 Prioritizing IT investments
 Monitoring and measuring results
 Aligning IT and business
 Creating & maintaining open communications
 Examples: IT governance is not a “technology” issue – it is a business issue for
everyone

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What is IT Governance in context
of strategy ?

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IT governance = IT Value Realization

 IT governance (COBIT,ITIL,CMMI,SIX SIGMA)
 IT governance addresses issues like:
 Identifying technology needs
 Prioritizing technology investments
 Assigning accountability for results
 Aligning IT and business
 Creating and maintaining open communications
 TQM improvement of the organizations as whole



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What are Benefits approaches of IT value ?

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Financial based parameters to assess IT investment benefits

 Payback Period
 Net Present Value(NPV)
 Internal Rate of Return(IRR)
 Economy Value Added(EVA)
 Return On Investment (ROI)
 Real Option Valuation(ROV)
 Return On Assets(ROA)
 Return On Infrastructure Employed(ROIE)
 Total Cost Ownership(TCO)
 Total Value Ownership(TVO)

Non - financial Benefits value
realization in public sector
MEASURED IN VALUE OF ACTIVITIES IN THE
CONTEXT OF THE BUSINESS STRATEGY

§ Public value of IT (PVIT) realization
o Constituent service level
o Operation service level
o Political return
§ Multidimensional criteria approach Value
o Information Economics (IE)
o Applied Information Economics(AIE)
o Total Economy Impact(TEI)
o Total Value of Opportunity (TVO)

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Measurement in the context business strategy

 ”if you can’t measure it you can’t manage it”
 Balance scorecard
customer, Finance, business processes and learning and growth)
 IT scorecard
User orientation (efficiency), Operation excellence (efficiency in dvpt &
operational) , Business contribution (Finance), Future orientation(approach to
skill set development and innovation)
 Portfolio Management Techniques
GIGA information portfolio framework, Ross and Beath investment quadrants,
MIT center for system information system research portfolio pyramid, Business
investment analysis
 Business Value measures for IT:
Categories of IT investment, Business value characteristics, Typical business
value outcomes, Key business value measure
 IT value benchmarking and realization:
performance measurement, Investment tracking financial of organization,
Benefit targeting

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Components of strategy alignment and IT
value management
 IT strategy
 Corporate of activities framework
 IT governance Framework for management of
IT activity
 IT project framework for management of IT
Activities
 IT Project Management Framework
Assessment Model

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IT Strategy in public sector

q THE
MAIN FOCUS AREAS IN COUNCIL’S
MUNICIPALITY:

 Enterprise Architecture and ICT governance
 IT governance
 Information management
 best value IT service delivery
 Enabling innovation and ICT Risk
management

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The council’s strategic priorities in e-government

 Safe community
 Customer service
 External communication
 Diversity and Strengthen the economy
 Leadership and Governance
 Information services and internal services



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Quality of IT value realization
management in local government

 Enablers: factors that Promote alignment
 Sharing Decision Making within IT portfolio
Management
 Alignment between ICT strategy and
corporate plan
 Linking high level of technical integration
with customer services
 Linking between IT projects with a value and
Alignment measurement tool

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What are Factors that reduce alignment in public sector?


q Misalignment in public sector
q Miscommunication in IT activities
q The lack of well defined IT plan
q The lack of value realization
q
q

q

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Core benefits of public sector in IT
value management realization

§ Costs reduction and efficiency gain
§ Quality of service delivery to businesses
and customer
§ Transparency, anticorruption, &
accountability
§ Increase the capacity of government
§ Network and community creation
§ Improve the quality of decision making
§ Promote use of ICT in other sectors of
society
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How to measure public value IT
frameworks PVIT“BENEFITS”
q DIFFERENT COUNTRIES HAVE DIFFERENT METHODS TO MEASURE
PVIT FRAMEWORK BENEFITS FROM INVESTMENTS

§ France: MAREVA “Methode d’Analyse et de REmontee de la Valeur”
(Measure profitability for the state, internal aspects, external aspects, necessity)

§ European Union: e-Government Economics Project
(Measure quantitative and qualitative components for each dimension of PVIT).

§ Australia: Demand and Value Assessment
(Assess the benefits of its e-Government initiatives. The study highlighted the need for
a comprehensive tangible and intangible benefits as well as the probable risks associated)

§ India: E-Governance Assessment Framework
(Measure service orientation technology, sustainability, cost effectiveness, and feasibility of replication.
The methodology consists of assessments for G2G, G2B, and G2C services.)

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E-GEP Framework public value benefits

EFFECIENCY DEMOCRACY EFFECTIVENESS

Cashable financial gains Openness Reduced administrative burden
Empowered employees Transparency and Increased user value and satisfaction
Better organizational and
accountability More inclusive public services
IT architecture
Participation

Financial and
Political value Constituent value
organizational value

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Conclusions
In public sector the IT value management can be
measured quantitative and qualitative with one
or more IT methodology framework in order to
achieve desired outcome by the stakeholders such
methodologies are , TQM 14 point by Deming ,
balanced scorecard, benchmarking, IT governance
(COBIT,ITIL,CMMI,SIX SIGMA)
which are helping board of directors and
managers to control and assess the business
strategy and IT strategy if are aligning in
adequate manner if not so can government take
early corrective action.

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REFERENCES

§ Stenning & Associates pty ltd(S&A) (2003). Final Repport:
Evaluation and Review of the e-procurement pilot project,
version 1.2, Hobart, Australia
§

§ Al-Hatami &Hales European and Mediterranean Conference on
information System 2010, April 12-13 2009, Abu Dhabi, UAE
§

§ Weerakkody, V., Janssen, J., & Hjort-Msdsen, K. (2007)
integration and enterprise architecture challenges in e-
government : A European perspective. International Journal of
cases on electronic commerce, 2(3),13-35.

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The End


Th
an
 ks


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IT Value Realization

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