CIOs miss the mark in proving IT's value

IT directors and CIOs are failing to measure the benefits of IT to their organisations in a systematic way, with only 42% having systems in place to track the value of IT to the business.

The headline finding from the latest quarterly Computer Weekly CIO Index survey of top IT management shows how far IT still has to go in promoting its central role to the business.

The finding supports a warning issued by Andrew Likierman, a professor at the London Business School, who told delegates at the City IT financial services forum last week that even those organisations that do try to measure the benefits of IT are often guilty of using the wrong measures to monitor success.

Likierman, a non-executive director of Barclays Bank and the Bank of England, said, "We really need better measures. The IT function should be clearly linked to organisational objectives. Cost, services and risk have to be anchored in the organisation and not in the IT function."

Likierman said that too often the wrong questions were asked when measuring IT's value. "Instead of posing questions such as, 'How prompt is the response?' we should be asking, 'Does the IT service fully meet your requirements?'"

Common problems in measuring IT performance identified by Likierman included performance being skewed to the measurable, the difficulty of gaining independent views on quality, and problems tracking outcomes.

"Paradoxically, the better integrated IT is into the business, the harder it becomes to measure the performance of the CIO.

"Boundaries are not easy to draw and are getting more difficult, which makes it harder to separate in performance terms."

Other key findings from the CIO Index included IT directors' weakening, but still marked, dissatisfaction with the business benefits of outsourcing.

In the latest poll, 38% of IT directors agreed that outsourcing had provided the expected benefits overall. This marked an improvement on the numbers registered in our April and July surveys - 25% and 30% respectively - but many CIOs remain far from convinced.

Confidence about managing change is also on the wane. The latest CIO Index poll revealed that 50% of IT directors now believe that change management is getting ­easier, compared with 61% six months ago.

Read the full report on our CIO Index findings about the business value provided by IT in next week's Computer Weekly