Book Review: Making Technology Investments Profitable
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The document discusses the importance of enterprise architecture as both an analytic and a synthetic discipline, emphasizing its value as a decision support tool for management. It reviews Jack Keen's book, 'Making Technology Investments Profitable', which provides a comprehensive roadmap for leveraging value in technology investments by focusing on business case development and the tangible and intangible benefits of projects. The book serves as a practical guide for IT architects and managers seeking to align technology initiatives with business objectives and successfully track value realization throughout the project lifecycle.
Book Review: Making Technology Investments Profitable
- 1. that are important when we extrapolate, as we are so often tempted to do, from the former to the latter. In closing, I note that there is one other connection between enterprise architecture and managing as designing, namely the growing attention paid to enterprise architecture as an analytic and decision support tool. While this may help increase its perceived value and thus its appeal to the management community, we have to be careful not to lose sight of the fact that enterprise architecture is primarily, to use the words of the book’s editors, a “design attitude”, and as such is inherently at least as much a synthetic as an analytic discipline. My thanks to Bill Brierly for bringing this important book to my attention. Len Fehskens is the Vice President, Skills and Capabilities for The Open Group. He is responsible for The Open Group's activities relating to the professionalization of the discipline of enterprise architecture. Making Technology Investments Profitable: ROI Roadmap from Business Case to Value Realization, Second Edition Jack M. Keen REVIEW BY IVER BAND And the user exclaimed with a snarl and a taunt, “It's just what I asked for, but not what I want!” So goes the final stanza of “‘Twas the Nite Before Implementation”, a decades-old IT parody of Clement Clark Moore’s “A Visit From St. Nicholas”. And so go many IT-enabled investments, from which the expected return mysteriously dissipates despite considerable diligence and expenditure. In “Making Technology Investments Profitable”, management consultant Jack Keen diagnoses and treats business and IT leaders that expect value but let it slip away. “On-value” is the essential companion to “on-time” and “on-budget”. Too often, leaders choose inferior investments, assume that on-time and on-budget programs1 are also on-value, and are forced to shut down programs after they disrupt or disappoint their intended beneficiaries. Keen’s approach begins with auditing value practices and orienting management towards value definition, accountability, and realization. It continues with instructions for business case development (Figure 1) 1 The word “project” can be substituted for program throughout this review. and evaluation. These processes should address both tangible and intangible benefits as well as risks. The benefits that organizations are most likely to consider tangible have five elements, including a premise, a clear cause and effect relationship to value, mathematical formulas, metrics that can be converted to financial impacts, and proof of the other four elements. Intangibles likely have only the first few of these elements, but the book demonstrates a number of techniques for converting intangibles to tangibles. Successful business case development, however, requires much more than analytical skills. Development teams must have members ready to play the roles of project manager, reporter, politician, salesperson, analyst, detective, and attorney. These teams should pay particular attention to the types of benefits and language that will resonate with the most influential stakeholders. They should place direct system benefits on the bottom rungs of a “value ladder” and tailor the top rungs to the manager of the primary decision-maker. Therefore, the value ladder must connect a series of increasingly broad benefits such as improved user speed and accuracy, increased customer satisfaction, increased customer retention and referrals, and finally increased revenue and profit. With well-justified, strategically, and politically aligned benefits woven into a compelling story of value, a business case has the greatest possible chance to attract funding. However, “money magnet” is only the first of several crucial business case roles. After program launch, the business case should become the beacon that keeps the program on-value and a tool to measure its progress (Figure 2). During implementation, program leaders should use the business case to encourage and guide the team and its executive patrons. Each system and process designer, for example, should be familiar with the value of the components they work on as promised in the business case. After implementation, program leaders should use the business case to track the progress of value realization, In keeping with its subject matter, “Making Technology Investments Profitable” is designed to be implemented right away, in whole or in part. The prose is engaging and well-organized and each chapter is a compact toolkit for evaluating or improving particular value practices. The book is replete with case studies, lists, exhibits, forms, graphical tools, and step-by-step instructions. A realistic scenario extends throughout the book, and the appendix gathers together its components into a complete business case. Enterprise architects can use “Making Technology Investments Profitable” to better align architectures and roadmaps with business intent, prioritize competing 58 © Journal of Enterprise Architecture – August 2011
- 2. investments, and guide system and process design. This book is ideal for all IT architects, program managers, executives, and others intent on fulfilling the promise of information technology. Figure 1: The Business Case Development Process1 Figure 2: The Roles (Functions) Performed by a Business Case and its Advocates throughout the Lifecycle of an IT-Enabled Investment 1 The illustrations in this review are based on the book and modeled in ArchiMate® by the reviewer. © Journal of Enterprise Architecture – August 2011 59