Importance of IT measurements for an organization
Importance of IT measurements for an organization
The performance of a business is a strategic issue which depends greatly on IT contribution. IT is crucial for any business to grow as it enables efficient and effective communication between the employees and with the customers. Similarly, in collaboration with internet, IT provides means of networking, marketing and communication. It provides storage capacity for the company’s data, data protection, data processing, transmission and retrieval of data as required (Alexandrou, 2009). Furthermore, it saves space which would have been used for storage of many paper works.
IT has many advantages to a business but it can also have disadvantages. It is therefore important for businesses to evaluate it before adopting it within its structure. IT offers different features and since different businesses have different needs it is therefore important for a business to lay down its objectives before adopting it. In most of the big organizations IT has been adopted entirely in most of their operations while the small ones use it in performing a number of operations. Adopting IT for the entire business operations requires much financial investment and analysis of the technology.
According to Myers (2004), few organizations have put in place measures that ensure their corporate strategies and IT are aligned. In other words, few organizations have put in place rigorous systems for measuring the value brought about by IT to their business. In some organizations tools for the management and measurement of IT spending are present and these include IT steering committee, activity based costing, annual budgets, tightly controlled systems of purchasing, benchmarking among others (Myers, 2004).
However, these tools do not measure its impacts on the business. Measurement of IT in an organization is vitally important but there are difficulties which hamper the evaluation processes. In most organizations the IT managers lack full understanding of the business and are therefore not included in the decisions made by the senior management personnel. The senior management personnel lack the knowledge of conducting IT measurement processes thus many organization do not measure their IT effectively.
To add to that most of the IT managers lack the fully understanding of the measurement of IT processes and will therefore not conduct them (Williams, n. d. ). In Curley’s (n. d. ) view, for IT to deliver business value, its measurement should be done in terms of revenue growth, profitability and customer satisfaction. The performance of the IT system in business is normally evaluated by checking how the business operations are improved. A good system should be able to improve the operations of the business.
The performance of an IT system should be directly proportional to its contribution to customer satisfaction. With improvements in the business operations, more customers will become satisfied with services provided by the business. Moreover, the measurement of IT performance is a complement to the measurement of IT contribution to customer satisfaction. The performance of IT is evaluated by the operations of the business while its contribution is evaluated by the increase in the number of customers and thus business growth.
The measurement of IT in an organization is vital as it is useful in justifying the existing or the proposed system, comparing different systems, providing tools for system management and in providing a learning experience (Bjork, 2000). When evaluating an IT system in a business several things are usually considered; effectiveness, efficiency and performance benefits. It is important for organizations to develop a framework for evaluating the potential costs and benefits of new IT systems, and the performance of these systems after being implemented.
Benefits of measuring IT By measuring and evaluating the IT system, its efficiency, effectiveness and performance benefits can be fully determined and this will be helpful in making decisions concerning the adoption of a new IT system. To add to that, the organization will gain an understanding of the existing IT and will therefore have the capability to determine whether it is beneficial to the current needs of the business or not. With IT measurements, the organization will be saved from wastage of monetary resources in purchasing low quality systems.
An organization might purchase IT systems which are not useful in meeting the objectives of the organization thereby leading to wastage of funds which would have been used for other important needs. Consequently, the business will be able to purchase a system which will be of much benefit to the organization. With an efficient IT system the business planning times will be greatly reduced, the cost of marketing will be greatly reduced and more inquiries will be handled within a short time. Similarly, there will be a reduction in the communication cost and paperwork.
Furthermore, an effective IT system will minimize business risks, increase the flexibility and competitiveness of the business, increase sales and will provide a sustainable increase in the market share. Furthermore, the performance benefits from the IT system include improvements in strategic intelligence for new markets, provision of capacity and space for business growth, overcoming obsolescence, provision of more relevant and reliable data, among others (Bjork, 2004). The measurements will be helpful in evaluating the weaknesses in the system and in providing guidelines on the ways of improving the system for the better.
In other words, they will provide an opportunity to evaluate the loopholes in the technology. As time goes the needs of an organization changes or increases and thus improvements in technology are required. The goals of most organizations is to grow and become competitive in business and as it grows its IT should also grow with it otherwise it will become a hindrance in achieving its goals. The measurement of IT is therefore essential as it provides an opportunity for further advancements in this technology.
In conclusion, IT measurements provide many benefits to an organization and are therefore essential. However, in many organizations, the success of IT in a business is measured in terms of the IT parameters which include capacity, processing speed and up time. This therefore shows that many businesses do not measure IT with regard to customer satisfaction or profitability. Customers are one of the most important assets of a business and should be included in IT measurements to ensure a sustainable business growth.
Similarly, organizations should invest more funds in IT measurements. In measuring the impacts of IT in organizations knowledge and understanding is a necessity and thus funds are required. Measurement of IT is not an easy task and cannot be done by anyone; IT professionals are threfore needed and should have much experience in IT measurements. Since in many organizations the IT professionals have little experience in IT measurements, IT experts from outside will be helpful in ensuring IT measurements are conducted in an efficient and effective manner.
University/College: University of Chicago
Type of paper: Thesis/Dissertation Chapter
Date: 24 September 2016
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