Value of It

The Value of IT

As the CEO meeting nears Barton is faced with the challenge of giving a numerical value of IT to the CEO thus faced with the question as to how to calculate the worth of IT in IVK Corp. I feel the firm’s most important consideration in deriving the value of IT is how to measure the value that the investment in IT is bringing in monetary terms. In the text Maggie quotes the example of an article by Harvard Business Review which says that it is no longer worth investing in IT as it had become a commodity which provided zero competitive advantage. However, she also quotes an example about Zara to show the other side of the coin that investment in IT does generates value and gives an edge to the firm. In IVK Corp. case Barton is unsure about the value IT is bringing to IVK as different departments get their projects in which IT is involved get approved but never report in monetary terms the benefit they got from IT instead they just declare the whole actual value of benefit which complicates the calculation of IT cost within IVK. Finally Maggie concludes and feels that it is not IT which provides value to the organization but the way IT is used makes a difference. For example mere buying a computer does not give any competitive advantage to any student but the way a student utilizes that computer to study gives him advantage over the other students. The focus on value of IT delivery is quite a big question for many firms because currently most of the competitors of any firm have the capability of investing in IT and there are equally easy ways by which IT investment can be imitated. The issue is that once the project on which the investment is imitated the competitive advantage disappears and that investment actually goes bad. It is also important because it helps the organization to know exactly how much it is spending on IT and how much money it is making from it. So, from a cost-benefit analysis point of view as well the value of IT remains a big...