Coming Soon

Imagine what life would be like if you could show your business customers and colleagues—be they CEOs, COOs, or CFOs—the precise value in dollars, euros, pounds, or yen that IT has created over the past 12 months. And why stop there? Imagine being able to predict exactly how much future value you could create for your business by improving the way you do certain things in IT. Too good to be true?

It might sound that way to CIOs and IT managers who find it a challenge to answer this simple question: What is IT’s contribution to the bottom line?

Though research has shown that the maturity—by which we mean robustness and sophistication—of IT practices and processes is the key contributor to the creation of business value, there is still no overarching model or framework for assessing an IT organization’s maturity or for showing how an increase in IT maturity pays off in incremental value for business. This makes it hard to identify where innovation is needed and which new practices are effective. IT management needs a new model.

The Innovation Value Institute (IVI)—a consortium of more than 40 leading organizations from industry, academia, and the nonprofit sector—is developing such a model: the IT Capability Maturity Framework (IT-CMF).  (See Exhibit 1.) The model covers four key dimensions:

• Managing IT like a business

• Managing the IT budget

• Delivering IT capability

• Realizing and assessing business value

In total, the model identifies 36 processes and categorizes them under these four dimensions to cover all activities in an IT department. An assessment of an IT organization’s maturity across these 36 processes, together with comparisons to industry benchmarks and best practices, will highlight the company’s key maturity gaps and value-creation opportunities. (See Exhibit 2.)

In this unique venture, some major competitors have agreed to collaborate under the principle of open innovation. These include Intel, Microsoft, BP, and Chevron. The Boston Consulting Group is a steering patron and a member of the consortium’s board of directors.

Things have moved fast since the IVI was founded in 2006. Already, pilot projects for processes such as enterprise architecture, innovation management, and benefits assessment and realization are under way. The consortium’s aim is to release these first components of the IT-CMF in February 2009 as part of the official IVI launch.

If you would like to learn more about the IVI’s activities, please feel free to contact either of the authors.