McKinsey, the
management consultancy, believes the way to overcome the
understanding gap between those who run business and those who run
technology is to produce an
annual technology report, along the lines of the financial or
corporate social responsibility report.
"The document would not only provide a candid overview of our
ability to
extract business value from technology but also
substantiate that analysis with hard metrics," it says.
The authors point out
almost every business process is
underpinned by technology, but the support is not always
visible. They suggest drawing an "anatomical" picture to show what
technology is used to improve processes and make the firm more
agile.
They suggest tying the report to stated business goals from the
corporate annual report. For example: goal ("increase sales and
total life cycle value of customer"); technology cause ("improve
precision in predicting low value customers"); and effect ("15%
increase in sales; 2% cut in customer churn; 3% increase in
high-value customers").
They also argue for a technology balance sheet that includes
tangible and intangible assets. This would show the shareholder
value embedded in the technology as well as return on that
investment and other financial metrics, they say.
"Examples and anecdotes (of the contribution from technology)
will make the numbers come alive," they say. This will allow
executives and other stakeholders to see how technology fits into
the company, with a shared vocabulary about the value that
technology creates.