CIOs Discuss Strategies for Demonstrating Value of IT

Computerworld - SCOTTSDALE, Ariz.
CIOs often have trouble communicating to senior management the value IT investments can deliver to their organizations. After an upgrade to his company's global network infrastructure last year, Baxter International Inc. CIO John Moon decided to take matters into his own hands.
After the networking project was done, Moon handed each of the business leaders at a postproduction senior management meeting a yellow cable. He then told them, "No matter where you are in the world [at any of Baxter's 300 offices], plug this into the wall, and you'll be connected" to the company's global network.
The tactic - as well as the message -- "was really eye-opening for them," noted Moon, whose Deerfield, Ill.-based health care company has a $350 million IT budget for 2003.
Moon was on a panel of IT leaders who discussed IT investment and value strategies at the Computerworld Premier 100 conference here last week.
At Avon Products Inc., Senior Vice President and CIO Harriet Edelman has squeezed business value out of optimizing systems and business processes in critical areas such as procurement and merchandising. Those moves have yielded $10 million in annualized benefits for the New York-based beauty products giant, she said, thanks in large part to her group's use of IT portfolio management techniques.
Still, Edelman was quick to acknowledge that it's important for CIOs and other IT leaders to avoid being arrogant or evasive when it comes to communicating the value of IT to senior management.
"It's an area that's rife with some danger," she said.
Even when IT initiatives deliver huge returns, Edelman said, the trick is to "stay humble and stay within their [business] point of view."
CIOs also sometimes make the mistake of overselling IT projects to top brass, Moon said. That's one reason why Baxter has a staff member whose role is to communicate the value that IT can deliver, he said.
Another way CIOs can get senior management to invest more in IT is by collaborating more closely with business-unit leaders on specific projects.
By persuading her business peers to take the lead on more IT/business initiatives, Edelman said she has helped increase Avon's spending on strategic and transformational IT efforts by 30% during the past two years.

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