Framework Based on Benefits Management and Enterprise Architecture

Framework Based on Benefits Management and Enterprise Architecture

António Rodrigues (Espírito Santo Informática/Banco Espírito Santo (ESI/BES), Portugal) and Henrique O’Neill (Instituto Universitário de Lisboa (ISCTE-IUL), Portugal)
Copyright: © 2012 |Pages: 18
DOI: 10.4018/irmj.2012040103
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Abstract

The relationship between Information Technology and Business has been growing, materialized through increasing investment in IT. This is typically considered a burden, as such companies have been seeking alternative supplying approaches like Outsourcing, Managed Services, or Cloud Computing. In this paper, the authors examine how investment is made and stress the balance that has to be reached between the expectations of the business versus the capabilities and cost of IT. A framework for assessing investments in IT that seeks to highlight the advantages of merging IT Benefits Management with an Enterprise Architecture is presented.
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Introduction

Today there are no doubts about the importance of Information Technology (IT). IT is always present in our everyday actions, since a common request for a product in any shop up to the more complex financial operation. For the use of IT to become possible and accessible to everyone there are millions of programs and thousands of equipment behind any single transaction.

To be able to provide new functionality to the end user, presenting new ways of doing business or establishing new channels of communication with the target audience, each company has to decide how to achieve the right balance between business needs and IT investments. When questioned, the senior managers strongly recognize the importance that IT has for the business, regardless of the industry sector. Figure 1 represents this widespread view.

Figure 1.

Answers from the Accenture survey to the question: “Do you agree with these statements regarding IT’s contribution to a high- performance business?” (adapted from Accenture, 2006)

This relationship was accentuated by virtue of globalization and increased competitiveness. IT must be able to respond to this new market dynamics. IT is also identified as a key element for economic recovery for many companies, as proved by a survey conducted by Accenture “72 per cent of business and IT executives have stated that their organizations now place more importance on the IT functions of their companies than they did before the financial crisis” (Accenture, 2010).

The aim of this paper is precisely to focus on how investment is made, to stress the balance that has to be reached between the expectations of the business versus the capabilities and cost of IT.

The article is divided into three parts. In the first part, called IT Investment, the old question between an investment and the resulting productivity is addressed. This question, despite being old, remains on the agenda. Today, more than ever, it is still necessary to emphasize that every investment must be carefully analyzed.

We also realize the introduction of new management models in the IT area, which will force the coexistence in the same company of a wide variety of IT services supply, such as Outsourcing, Managed Services or SaaS (Software as a Service). The first part concludes that the majority of companies poorly manage the benefits of its investments in IT projects.

In the second part of the paper a proposal for a framework is presented, which aims to combine a new approach to the benefits management, with an innovative way of looking at the enterprise architecture. This combination aims to bring together two absolutely fundamental concepts. On one hand the benefits management approach teaches us how to spend well, but only having the vision of isolated projects. On the other hand the enterprise architecture allows us to see the company as a whole, which is a common theme necessary to develop new business and technology projects.

The third phase corresponds to the opportunity of putting the framework into practice. It describes the lessons learned by implementing the proposed ideas into real projects.

The proposed framework presented here, is the result of an applied project in management information systems set in an international financial institution. Due to this research it was possible to develop more detailed insights in the benefits management domains, which is now the component that presents the higher level of maturity. The enterprise architecture component is currently under investigation in the scope of a research project that is being conducted under a Ph.D. program.

It Investment

When the term IT investment is mentioned it is often related to productivity. The issue that is not new, was first raised in the mid-80s, when investments had not yet assumed the proportions that they currently have. Robert Solow, Nobel Prize in Economics in 1987 ironically said: “Can you see the computer age everywhere but not in the Productivity Statistics”. This statement came to be known as the productivity paradox. Despite this claim to have more than twenty years, the problem remains, and other authors continue to reflect on the subject, especially Diana Farrell and Michael Porter.

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