The equation for measuring the business value

The business value of IT is difficult to define. One way to approximate is is to use the IT value hierarchy to define the three components of value:

1. User satisfaction. 
User satisfaction is the best representation of the level 1 and 2 of the IT value hierarchy. It shows is the basic needs of the users are met. Without this, it is impossible to deliver business value.

2. Alignment. 
Alignment represents the three types of alignement (team, vision and business). It shows if the role of the it department is aligned with the expectations o the business. 

3. Benchmark. 
Benchmarks shows if the IT departments have the resources to back its ambition. Without proper resources the IT departments will make commitments it cannot possible deliver. 

The product of these three variables gives us the Business Value Index, the value IT provides to the business. It also allows IT to compare itself to the industry and track their evolution over time. 

Posted on July 4, 2014 and filed under blog.