Many IT training organizations conduct training on creating and managing requirements for IT projects. Nuvalo helps client create effective RFPs for existing or prospective IT providers. Prior to RFP creation, we discuss the value that our client’s IT department provides to its organization, because a successful RFP begins by valuing one’s own IT department as an in-house service provider – a non-traditional perception. Using this approach has led us to change many preliminary RFP drafts that clients have shared, for the better.

Nuvalo is not the only IT consulting and sourcing firm that recognizes and addresses this perception problem. Industry thought leaders, Robert Naegle and Jeff Kaplan, also have been expressing this value-chain based school of thought. (The concept of value chain originates with theorist Michael Porter, from his book Competitive Advantage.)

Robert Naegle, Gartner’s Research Director, suggests that we start thinking about IT’s business value by asking two questions:

  1. What does the business value?
  2. How can IT impact what the business values?

Jeff Kaplan, author of “Strategic IT Portfolio management,” is concerned that all the disparate IT associations (ITIL, SEI, COBIT, etc.), as well as academics who study and teach IT management, have their own, process-oriented frameworks, but none have a true value chain orientation. They do not define what the core value-add process is for the IT organization. It’s very easy to lose sight of what is primary and what is secondary, or supportive when reading through these various perspectives.

For example, a reason that software construction or delivery activity is seen as “real” work by many practitioners: it is a primary value chain activity. Without actually doing software construction, activities such as configuration management, verification and validation, and process and product quality assurance have no meaning. These supporting processes take their rightful place as enablers, but the central priority of value delivery remains. The value chain is that sequence of activities which directly adds value to the customer’s end experience.

As soon as we take the point-of-view that IT is a value deliverer in the operation chain, the next step is to identify and document how business measures the successful contribution of IT. Watch for our next post where we will unfold the firm infrastructure and Operations metrics and approach.