Quantify the business value of Information Governance Solutions
Per dictionary.com in·no·va·tion
1.something new or different introduced
2.the act of innovating; introduction of new things or methods
In our strive for continuous excellence, many of us are innovating at an everyday level. Per current thinking, Innovation can be incremental and emergent or may refer to radical and revolutionary changes in thinking, products, processes, or organizations. IBM encourages each and every one of its employees to innovate and introduce new methods and thinking to influence and impact our work and clients continuously. This deinitely adds a dimension and challenge to everyday routines and makes working at IBM an absolute joy. I recently came across this video of Umair Haque speaking at the BRITE '09 Conference. Umair Haque is the director of the Havas Media Lab and he discusses why firms looking to innovate should start by reconceiving the costs and benefits that shape the behavior of their consumers.
Very interesting ... well worth the 20 minutes if you can spare.
In his book "Achieving Business Value from Technology", Tony Murphy shares the five pillars of benefit realization as well as the Gartner recommended Risk Management approach. If you are just starting on a journey and need a starting point on business value and related topics, this book is a good place to start .... IMHO
Here is some text from the Inside Flap (Source: amazon.com)
Achieving Business Value from Technology offers the expert guidance, real-world advice, and practical methodology managers need to ensure that their dollars aren’t wasted on IT disasters. It shows them how to assess projects in real time and decide whether to alter, abandon, or continue them with a clear understanding of likely impact on the business.
With the increasing importance of technology in a business world redefined by globalization, high-octane competition, and the shift from mass production to mass customization, it’s more important than ever that your IT dollars are well spent in pursuit of efficiency, adaptability, and market mobility. Knowing which initiatives offer real business value can be the competitive advantage your business needs to thrive. Simply put, no matter what your business is, IT is your business.
Achieving Business Value from Technology offers proven techniques, methodologies, governance mechanisms, and best practice guidelines to guarantee your money is transforming your current IT setup from potential value to real value. The approach offered in this book–and developed by the experts in Gartner’s Consulting and Measurement practices–has been proven to help managers make the right IT decisions every time.
Author Tony Murphy outlines a systematic process managers can use to identify, track, and realize benefits and value from their IT investments. This methodology helps management bridge the traditional gap between the business and IT sides of the organization and incorporates IT value metrics into conventional management reporting systems.
Managers will learn to monitor opportunities, risks, and impediments at all stages of the investment cycle and rest assured that the money they invest in IT will bring long-lasting and measurable benefits to the organization.
The author also provides guidelines for undertaking post-implementation benefit audits and IT sourcing, as well as tips and techniques for optimizing asset management and minimizing ongoing total cost of ownership.
The Technology Priority Survey CIO Magazine believes that Enterprise Data Management a key priority. Here is an executive summary of this article from CIO magazine.
Cloud, BI and Business Process Management Top of Mind for IT Professionals
Cloud computing services (48 percent) top the list of technology priorities on the radar or among the technologies
technology decision-makers are actively researching in the coming year, according to an exclusive survey
conducted by CIO magazine in January 2010. The survey, conducted among 405 IT professionals involved in
buying technology products and services for their organizations, also finds business intelligence applications
(35 percent), business process management (35 percent), enterprise data management (32 percent), and
enterprise architecture/SOA among the top technologies of interest.
Source: CIO magazine
In Today's World, Quantifying business value hard dollar benefits and relating it to applicable business terms is a key driver for most Executive decision making. Here is a a quick snapshot of some of the Business Benefit categories for consideration when calculating these benefits
Business Operating Efficiency is a project benefit used in calculating the benefits of a project or initiative and the ROI. Calculates the impact the project has on the business units and operating expenses. These impacts include helping to increase productivity, reduce the risk of productivity losses, avoid purchases, reduce expenses and reduce overhead. Business Operating Efficiency calculates the project's impact on reducing key corporate operating expense includes including: Cost of Goods Sold (COGS), Sales and Marketing (S&M), General and Administrative (G&A),Research and Development (R&D), Interest Expenses and Depreciation.
Business Strategic Advantage is a project benefit used in calculating the benefits of a project or initiative and the ROI. Calculates the impact the project has on the corporate revenue and sales. These impacts include helping to increase sales productivity, customer acquisition and loyalty, increase sales effectiveness or the launch of a new business. The benefits are reflected as impacts to Revenue on the corporate financials. Thecalculation includes impact on revenue, and a calculation of net margin contribution of the benefit. The net margin contribution of the benefit is what is actually used in the net benefit, TCO and/or ROI calculation.
In a recent study by the Business Value Assessment team focused on identifying key trends amongst the 200+ customers we touched with Business Value Assessments for deploying OPTIM solutions such as Data Growth, Test Data Management, Data Privacy and Decommissioning. Some of the key quantifiable findings were the Average ROI 199%, Average IRR 127.5%, Average Burdened Storage Cost per GB per year $60 and the Average payback period was under 8 months. The analysis spanned multiple geographies and customers from various verticals including Insurance, Financial, Telecommunications, Pharmaceutical, Transport, Retail, Aerospace, Healthcare, Manufacturing and the Government. These research findings will be used as a guiding reference for IBM customers and a foundation for future engagements.
Here is an interesting article on the rising costs of data breaches published in January 2010.
"The cost of a data breach increased last year to $204 per compromised customer record, according to the Ponemon Institute's annual study. The average total cost of a data breach rose from $6.65 million in 2008 to $6.75 million in 2009 ..." Read more at http://www.pcworld.com/businesscenter/article/187611/data_breaches_get_costlier.html
Dr Larry Ponemon, Chair and Founder of the Ponemon Institute notes the main causes for a data breach based on the results from 45 companies that shared their stories for the "Fifth Annual U.S. Cost of Data Breach Study," sponsored by PGP - "As part of our analysis, we try to get at the root cause of the data breach," Ponemon says. "There's negligence, where people make mistakes, such as lost laptops, accounting for 40% of the data breach cases. There are system glitches, such as a third-party sending out statements they shouldn't, which was 36%. And there are malicious and criminal attacks, at 24%."
Data Growth .... Transform Communication ... Everyone is equal .... How Social Network has changed business
Constant Data Growth at rates that are too scary to even imagine .... demographics and data are changing at a pace that we are all trying to understand and predict. A recent HBR article discusses the topic of how social networking is changing business. The article indicates how leaders from companies such as IBM, Apple, Pepsico amongst others are all active users using the medium to get their message across to everyone in real-time. "Social networking is also flattening organizations by distributing access to information. Everyone is equal on the social network. No hierarchies need get involved."**
"A year ago, many people poked fun at Facebook as a place where kids shared their latest party news. Today more than 600 million users worldwide are active on the site. The most rapidly growing demographic is people over forty. More than 300 million people spend at least one hour a day on Facebook. Approximately two hundred million people are active on Twitter in spite of — or because of — its 140-character limitation. Another 100 million use LinkedIn. None of these social networks even existed at the beginning of the decade."**
Interesting read http://blogs.hbr.org/hbsfaculty/2010/12/how-social-networking-has-chan.html
** Source: http://blogs.hbr.org
A recent study by the Business Value Assessment team focused on identifying key trends amongst the 200+ customers we touched with Business Value Assessments for deploying OPTIM solutions such as Data Growth, Test Data Management, Data Privacy and Decommissioning. Some of the key quantifiable findings were the Average ROI 199%, Average IRR 127.5%, Average Burdened Storage Cost per GB per year $60 and the Average payback period was under 8 months. The analysis spanned multiple geographies and customers from various verticals including Insurance, Financial, Telecommunications, Pharmaceutical, Transport, Retail, Aerospace, Healthcare, Manufacturing and the Government. These research findings will be used as a guiding reference for IBM customers and a foundation for future engagements.
The Fully Burdened cost of storage is an all-consuming topic especially important for business owners trying to get clarity on the Total Cost of Ownership for storage. Here is a link to a slide that articulates the industry average fully burdened IT infrastructure cost percentages to support data growth. Categories include disk storage with tape, software costs, infrastructure costs such as telecom, power, floor and staffing costs.
I also wanted to share a comment about the carbon footprint of a GB. Ever thought about that ? I am sure all of us are so focused on being green (or is blue the new green!) that we have at some point in time thought about this. Here is a snapshot of a comment from Matt (Source http://www.vertatique.com/?q=storage-costs-average-25gbmonth#comment-1993)
dcarli asks, "What's the carbon footprint per megabyte stored per month?"
GB is the new MB, so let's look at those.
I have a .5TB NAS device on the office network, rated at 5.6W. I ran the numbers and got ~11 grams of carbon per GB per month, with an electricity cost of 1/10 of a cent.
Of course, I don't know how representative my storage is of the global storage energy profile and a detailed analysis is more complicated.
Our device has a automatic sleep mode, rated at 0.6W. The drive is probably asleep or completely off 12 hours/day, which would cut the footprint almost in half. On the upside, I'm not counting the carbon footprint of the backups, which in a data center might happen at least once a day. Or the data center AC. Or redundant storage, if required. Or the carbon footprint involved in the manufacture and ultimate disposal of the device, backup media, etc.
11 grams does not sound like much; its all those GBs in the aggregate that generates a lot of carbon. This is the materiality problem, which we saw clearly in the motivational analysis for digital delivery.
According to IDC, the amount of data created and replicated globally in 2008 was 486 exabytes (486 billion GB). At 11 grams per GB per month, that is a monthly storage footprint of ~5 million metric tons of carbon, or ~60 million tons/year. ICT is said to account for ~600 million metric tons, which would put storage at ~10%. These are all rough estimates, but give us an order-of-magnitude perspective. **
Here is an interesting view of the dialogue shift from focusing on "price" to "value of services" in the advertising agencies world. Read the full article here
Source: Advertising Age