The Business Value of Information Technology Yuliani Dwi Lestari dan Togar M. Simatupang Sekolah Bisnis dan Manajemen Institut Teknologi Bandung Dipresentasikan pada Seminar Information Technology (IT) Value Engineering diselenggarakan oleh KK Teknologi Informasi Sekolah Teknik Elektro dan Informatika (STEI) ITB Kampus ITB Jatinangor - Kamis, 4 Desember 2014
Provides a brief introduction to the business value of Information Technology, a brief survey of the benefits of IT in Business as reported by major industry studies, and an overview of popular value methods. - PowerPoint PPT Presentation
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The Business Value of Information Technology
Yuliani Dwi Lestari dan Togar M. Simatupang
Sekolah Bisnis dan Manajemen
Institut Teknologi Bandung
Dipresentasikan pada Seminar Information Technology (IT) Value Engineering diselenggarakan olehKK Teknologi Informasi Sekolah Teknik Elektro dan Informatika (STEI) ITB
Kampus ITB Jatinangor - Kamis, 4 Desember 2014
Outline
• Basic Definitions
• Examples of the value of IT in Business
• Present Models of the Value of IT Investments
• The Practice of Business Value
• Concluding remarks
2
Objective
• Provides a brief introduction to the business value of Information Technology, a brief survey of the benefits of IT in Business as reported by major industry studies, and an overview of popular value methods.
• Provides a suite of basic metrics useful for quantifying the business value of Information Technology.
• Discusses the practice of the business value of Information Technology.
3
Basic Definitions
4
Objectives of a Business
• Create value for its shareholders while maintaining a sound financial position.
• Other important objectives include:
– Employee satisfaction
– Social responsibility
– Ethical consideration
5
Business as a money engine
6
Business Value
• An approach for estimating the tangible and intangible worth of organizational assets.
• An appraisal of intellectual assets such as knowledge, experience, and skills.
• A technique for determining the complete worth of an investment to an enterprise.
• A method of determining the health and well-being of a firm in the long run.
• A set of measures including employee, customer, supplier, alliance, management, and societal value.
7
Sources of Business Value
8
New Business Platform
9
Information Technology is mainly an enabler, and a facilitator of various business functions
10
The recursive relationship between It Capabilities and Business Process Redesign
Business Process
Redesign
IT Capabilities
How can IT support business processes?
How can business processes be transformed using IT?
11
Business Value and the Role of ICT
Information and Communications TechnologiesActing as an Enabler and as a Differentiator
ManagementTeam
Innovation
CommercialAdvantage
FinancialPerformance
CustomerValue
12
Business transformation through ICTThe four components…
BusinessTransformation
Through ICT
Technology Adoption
Internet connectivity
Broadband
Email
Website
LAN/WAN
Wireless
Application integration
Strategy and Motivation
Importance of ICT
Demands of Customers
Demands of Suppliers
IT skills within organisation
Influences
Support
Business Processes
Ordering online
Paying online
Selling online
Online collaboration
Sharing knowledge online
Managing supplier relationships
Managing customer relationships
Attitudes and Impact
Benefits gained to-date
Return on investment
Business growth profile
Attitude to future adoption
Source: Gordon Lee (2005), Increasing the Value of Business: The Role of ICT.13
IT Investment Business Value
Source: Business relevance of IT investments at http://www.itdec.eu/14
Examples of the value of IT in Business
15
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The Value of Business Intelligence
Source: A Business Intelligence solution helps you discover the added value of an ERP at http://www.seniorerp.ro/en/a-business-intelligence-solution-helps-you-discover-the-added-value-of-an-erp/
The results of the investment:• Improving the decision-making process• Significant decrease of the dependency on the IT Department• Increased visibility over the entire business• Optimize the business for future changes