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Enterprise Value Awards - Overview

Enterprise Value Awards - Overview

The tremendous impact and quality of these winning systems, as well as the many other great contenders we reviewed, could make it tempting for the IT community to relax a bit. After all those battles with CEOs, CFOs, resistant managers and users, few today would dispute the value of IT to the enterprise - and the world. Some might think that - given the recent storms in both our political and economic climates - it's time for a rest, a time to stop pushing and innovating so hard. A time to ease up in the long campaign to measure, prove and communicate the value of IT.

While that thinking would be understandable, acting on it would be a mistake. Times have gotten much tougher since these winning systems were implemented (by requirement, they're all at least 2 years old), and the result has been a general hunkering down in organisations and a renewed focus on the basics - efficiency, effectiveness, core value. IT is uniquely suited to bring organisations closer to those fundamentals, but given the increasing emphasis on financial fundamentals, it had better be able to prove that that's what it's doing.

"I think businesses are going to be much more focused on their core promises to their customers and their employees," says judge Gregor Bailar, former Nasdaq CIO and executive vice president of IT operations, now CIO of Capital One Financial in Falls Church, Va. "I think value will be measured by how close you stay to those promises."

"People want to return to fundamentals," says judge John Glaser, vice president and CIO of Partners HealthCare System in Boston. In business, that means "reducing costs, achieving competitive positions and managing relationships. We'll be less willing to embark on things that are more speculative on a much more distant future, so we will see a retraction back to the core."

For IT, that means that investments going forward must be more tightly linked than ever to core business processes, and any core value delivered must be demonstrated clearly.

At the same time, corporations will increasingly rely on IT to help drive the business, as we've already seen to some extent in this year's winning systems. As markets tighten and competition increases, IT will have to carry its own weight by uncovering new sources of revenue. In fact, one of the best means of accomplishing that may very well be selling systems developed for internal use to other companies. That's a trend that seems to have taken a strong hold over the years, and we saw further evidence of it this year in winners Pennsylvania Department of Environmental Protection and the MDOT, as well as a host of other contenders.

Indeed, this year's judges got into a lengthy debate about that trend and the gray area it creates in the context of the Enterprise Value Awards. IT vendors have never been considered eligible to win the award for the technology products they sell. Rather, recipients have been companies in other industries that used IT in some way that delivered value to them either financially or strategically.

Now that we're seeing an increasing number of companies collecting revenue from selling the technology they developed, it raises a new question: Is the IT value these companies are claiming still the product of the application of IT to their business problems, or are they now essentially IT vendors and therefore ineligible?

"Value is becoming grayer and more multifaceted, and the separation between traditional business using traditional IT to make the traditional business better is getting fuzzier and weaker because now they're actually in the IT business," says Glaser.

Companies following this trend are essentially automating their core competencies and services, and that may become a key competitive differentiator in coming years. "That's where the innovation in the industry is coming from - that's where the most value has been created," says Barker.

In addition to altering how we define IT value, this trend also changes our notions of what it means to be in business in a particular industry. The lines dividing companies, customers, business partners, industries and even competitors are blurring, and that's due in large part to IT.

That may make life more difficult for our Enterprise Value Awards judges, as they try to pick out the top tier amid the context of current trends, but it promises a world of opportunity for CIOs to help shape the future of their organisations.

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