Measures of the Business Value of IT

Abstract

In any business a “dashboard” of vital performance indicators is needed to gauge how the company is faring. Such a dashboard, consisting of the appropriate measures to indicate strengths and weaknesses, provides a guide for management and forms the core of planning and control. A dashboard of performance indicators allows management to valuate the contribution of several factors that impact the overall performance of the organization. One of these factors is the application of IT. To valuate IT, a dashboard of relevant performance indicators for IT must be developed. The BtripleE framework offers the structure of the dashboard and identifies the distinct but interdependent levels of Business value of IT, Effectiveness of IT, and Effectiveness and Efficiency of IT supply. This chapter aims at developing the appropriate performance indicators (the gauges) at the first level within this structure: measures of the business value of IT.