Towards Value-Based Management of Flexible IT Environments

Senior executives often criticise the lack of visible returns from expensive investments in Information Technology (IT). In addition, accelerating changes in market environments demand higher business flexibility from IT services which exacerbates the difficulty of managing a return on IT-investment. This paper conducts a state-of-the-art review of methods currently in use for IT controlling, valuebased IT management and IT flexibility maintenance. We conclude that no existing method is suitable for assessing the business value created by IT assets. Following a classification of management objectives pursued by IT investments that we derived from the literature survey, we then interviewed 22 top information management experts (CIOs & IT Consultant Partners) in depth. From these interviews we gathered a set of practise-based requirements for value-based IT management in today’s flexible business environments. We also determined from the interviews that much of the literature recommended methodology is too complicated to put into practice. We therefore have developed a process (IT Value Mapping), that guides IT managers in the selection of appropriate evaluation methods that match management objectives for an organisation’s IT investments. A corresponding framework (IT Value Matrix) consolidates the results and provides an integrated view on the business impacts of IT assets. We conclude with a critical appraisal of our approach and suggestions for future research in this area.