Abstract

Companies’ executives have long realised the importance of IT in conducting business. As such, an ever larger portion of capital is allocated to IT. Managers see an opportunity to reduce the input cost of producing value for clients by reducing IT expenditure; however, managers need a clear picture of the value of IT to make appropriate cut of IT cost. This study explores the value the IT unit provides to business, by investigating a method of identifying IT metrics that are significant to IT managers and extending their significance beyond the IT unit to business executives. The Gartner business value model was used to link IT metrics to financial metrics in a South African financial services company. Senior business executives, business process owners and IT respondents were interviewed to get pertinent information, and an exploratory approach was taken to investigate the information garnered. The results illustrate that if a set of leading indicators of financial performance can be identified by senior business executives, the business activities that support these leading indicators and the IT services these activities rely on can be uncovered. By identifying IT services that have a bearing on future financial performance, the metrics recorded around them may be used to demonstrate the impact that the IT unit has on future revenue.

Key words: Business value, ITSM, metrics.