Today, we have a guest writer, David Goldstein, Ph.D., Managing Partner and Co-Founder of Knowledge Management Associates, LLC. Thanks for this great post David!
Communicating IT Value to the Business
George Westerman gave an excellent talk at last week's Boston SIM monthly meeting. He spoke to the CIOs in the audience about how to communicate the value they provide to senior line management. The information is expanded upon in the book he co-authored with Richard Hunter, "Real Business of IT: How CIOs Create and Communicate Value." George is a Research Scientist at the Center for Information Systems Research (CISR) at the MIT Sloan School of Management. His insights are based on extensive surveys and interviews of CIOs.
George's principal message was that CIOs must take control of the value conversation. They shouldn't wait to be asked by line managers. Their speech, both within and outside of the IT organization, should focus less on technology and more on how the technology improves business value--reduces cost or enhances revenue.
One tool that George displayed was a cascade chart that illustrated how the IT budget is both reducing company cost and increasing revenue. I'm a big believer in using charts to tell a story. KMA is the maker of Mekko Graphics, the best business charting software on the market (in my humble, but biased opinion).
Here is my interpretation of George's chart:
A CIO would use this chart to present a high level view of their upcoming IT budget to the CFO and the senior management team. It highlights, in business terms, the impact of three key cost cutting initiatives, one required regulatory initiative, and three revenue enhancement initiatives.
To download a PowerPoint version of the chart, click here: Download ITBudgetCascade. To edit the chart, you'll have to purchase a copy of Mekko Graphics.
Some simple charts that are both well-thought out and well-presented can go a long way to improving the dialogue between IT management and the rest of your organization's senior leadership team.
