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Measure Value of IT in an organization

Recommend various components that may be used to measure the value of an IS and IT department to a company. Include the following:

Metrics that measure the effectiveness of IS and IT. Also, metrics that measure their efficiency and the difference between metrics of effectiveness and efficiency
Methods used to measure the economic value of an IT department to a company
Models for assessing the IS value put in place by the IT department
Whether or not traditional financial ratios and measurements must be applied to determining the value of IT

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Metrics that measure the effectiveness of IS and IT. Also, metrics that measure their efficiency and the difference between metrics of effectiveness and efficiency.

There are numerous quantitative and qualitative metrics that can be measure the effectiveness of IS and IT in an organization. First of all, quantitative metrics such as revenues, profitability, operating margins, etc. can be used to understand the effectiveness of IT strategy of an organization on the overall revenues and profitability of the organization. Effective IT infrastructure does contribute positively to the revenues and profitability and thus, these quantitative metrics reflect the performance of IT department.

Apart from these quantitative metrics, qualitative metrics such as customer satisfaction, quality standards, timeliness, convenience, employee satisfaction, etc. are very useful in assessing the intangible benefits and effectiveness of IT in an organization.

Efficiency means doing this in a right manner whereas effectiveness is doing the right things. The effectiveness of IT can be evaluated by looking at metrics such as customer satisfaction, new customer acquisition and ...

Solution Summary

Discusses measurement of value of IT department in an organization.

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