IT capabilities have become an increasingly significant factor in external assessment of enterprise valuation. Those looking to increase net worth must now consider IT as a strategic enabler rather than a business utility, and demonstrate a holistic, mature approach towards IT at all levels across the organisation.
Below are the top five ways business leaders can assess the effectiveness of their current IT capabilities to maximise enterprise value.
Demonstrate a clear IT Strategy
A well-defined and executive sponsored IT strategy which aligns investments with business objectives is paramount. Rapid changes in technology and the IT services market mean that projects requiring years of implementation and expecting a long-term ROI inevitably fail, so focus on the next two to three years and define individual initiatives that will take no longer than six months to implement.
Proactively address risks
Changing business expectations and an increasing reliance on IT means that most organisations are seeking guarantees around availability of key business systems. Next-day recovery is no longer acceptable, so invest in disaster recovery provisions that protect customer-facing operations first, and execute regular tests to prepare IT and the rest of the business for a real disaster eventuality.
Provide quality Business & Management Information
A good Management or Business Information system will allow aggregation of information from existing systems with minimal intrusive changes to the original data. Trust is a major factor in the success and ultimate value of BI/MI – data must be accurate and relevant, as well as timely and accessible.
Strive to achieve a common and standardised platform across all areas of your business – define and publish hardware and software standards, and introduce governance measures to enforce them. Choose industry standard technologies and packaged applications where you can, and bespoke customisation or development only where absolutely required – short term cost savings often being outweighed by long term ownership costs.
Operational effectiveness & efficiency
Whether you choose to insource or outsource, manage IT like a business – customer-focused, competitive and trusted across the organisation. Introduce and monitor meaningful KPIs that drive improving service levels, and exploit supplier relationships that add structure and scale to the IT department. Consolidate systems and operations, adopt centralised or cloud-based computing for greater cost predictability and reduced operational risk.