1 2009 ISACA All rights reserved.

Unlocking the Value of Unlocking the Value of Technology InvestmentsTechnology Investments

Speaker Name/TitleSpeaker Name/TitleDateDate

2009 ISACA All rights reserved. 2

The Importance of Reliable InvestmentThe Importance of Reliable Investment

Yet more than 2 out of 10 enterprise IT projects are outright failures.*

You would not buy a car that failed to start 20 percent of the time.

You would not invest in a mutual fund that consistently lost 20 percent of its value.

*The Standish Group, 2006

2009 ISACA All rights reserved. 3

IT Investments Bring Both Value IT Investments Bring Both Value andand Risk Risk

• IT investments are about enabling business change and can bring enormous returns if managed properly

• Yet, without effective governance and good management, there is an equally significant risk to destroy value

‘The concept of value relies on the relationship between meeting the expectations of many differing stakeholders and the resources used in doing

so. The aim of value management is to reconcile these differences …’

— John Thorp, CMC, I.S.P.Val IT researcher and developer and author, The Information Paradox [as adapted from the Institute of Value Management]

2009 ISACA All rights reserved. 4

A New Approach is NeededA New Approach is Needed

• Managing IT-enabled change requires that IT investments be managed

• One approach is to apply the principles of financial portfolio management to evaluating, selecting and managing IT investments over their full economic life cycle

A Massachusetts Institute of Technology (MIT) (USA) study of more than 300 enterprises in 23 countries found that faster-growing and more agile firms such as 7-11 Japan, United Parcel Service (UPS) and ING Direct all had a

portfolio approach to IT management …

2009 ISACA All rights reserved. 5

Val ITVal IT™™

• Proven practices and techniques for evaluating and managing investment in business change and innovation

• Val IT helps executives:– Increase the probability of picking winners– Increase the likelihood of IT investment success– Reduce surprises from IT cost and delivery date overruns– Reduce costs due to inefficient investments

2009 ISACA All rights reserved. 6

Developed by the Leaders in IT GovernanceDeveloped by the Leaders in IT Governance

Created by ISACA, Fujitsu Consulting, ING and SeaQuation

Professional association with 86,000 constituents. Worldwide leader in IT governance, control, security and assurance.

Offers the CISA, CISM and CGEIT certifications.

2009 ISACA All rights reserved. 7

Why Val ITWhy Val IT™™??

An organisation needs stronger governance over IT investments if:• IT investments are not supporting the business strategy or

providing expected value• There are too many projects, resulting in inefficient use of

resources• Projects often are delayed, run over budget, and/or do not

provide the needed benefits• There is an inability to cancel projects when necessary• It needs to ensure compliance to industry or governmental

regulations

2009 ISACA All rights reserved. 8

The strategic question

The architecture question

The value question

The delivery question

A Comprehensive ApproachA Comprehensive Approach

• Many enterprises practice elements of Val IT™ already• Val IT™ provides a consistent, repeatable and comprehensive approach• IT and business become equal shareholders because Val IT™ helps

management to answer these key questions:*

* Based on the Four ‘Are’s as described by John Thorp in his book The Information Paradox, written jointly with Fujitsu, first published in 1998 and revised in 2003

2009 ISACA All rights reserved. 9

The Seven Principles of Val ITThe Seven Principles of Val IT™™

IT-enabled investments will:1. Be managed as a portfolio of investments2. Include the full scope of activities required to achieve business value3. Be managed through their full economic life cycle

Value delivery practices will:4. Recognise different categories of investments to be

evaluated and managed differently5. Define and monitor key metrics and respond quickly

to any changes or deviations6. Engage all stakeholders and assign appropriate accountability

for delivery of capabilities and realisation of business benefits7. Be continually monitored, evaluated and improved

2009 ISACA All rights reserved. 10

How Val ITHow Val IT™™ Works Works

Establish informed andcommitted leadership.

Align and integrate valuemanagement with enterprise

financial planning.

Define andimplement processes.

Establish effectivegovernance monitoring.

Define portfolio characteristics.

Continuously improve value management practices.

Establish strategic directionand target investment mix.

Evaluate and selectprogrammes to fund.

Determine the availability and sources of funds.

Monitor and reporton investment

portfolio performance.

Manage the availabilityof human resources.

Optimise investmentportfolio performance.

Understand the candidateprogramme and

implementation options.

Develop the detailed candidate

programme business case.

Develop the programme plan.

Launch and managethe programme.

Develop full life cycle costsand benefits.

Update operationalIT portfolios.

Develop and evaluate the initial programme concept

business case.

Update the business case. Monitor and report onthe programme. Retire the programme.

Value Governance(VG)

Portfolio Management

(PM)

Investment Management

(IM)

2009 ISACA All rights reserved. 11

Top Organisations Support Val ITTop Organisations Support Val IT™™

For more information, please visit www.isaca.org/valit

- Craig Symons, Vice President, Principal Analyst Forrester Research in the Report “From IT Governance to Value Delivery” 22 June 2007

Organisations struggling to execute IT strategies that deliver business value and to communicate this value

to stakeholders should evaluate Val IT as a tool for improved value delivery.

2009 ISACA All rights reserved. 12

Getting StartedGetting Started

Visit www.isaca.org/valit to learn more or download a free copy of the Val IT™ framework, Getting Started With Value Management and

The Business Case.