Chris Kadwill, Head of Information and Communications Technology Operations, town of Luton, U.K.

Plato's Republic Redux (cont.)

Public-sector organizations find new tools for quantifying the benefits of their IT investments

The first step is to develop a "decision framework" to study benefits, costs, and risk. Next, an "alternatives analysis" applies the framework criteria to possible alternative projects. The third step dives deeper into cost estimates and creates value and risk scores to help determine the investment's ROI. Finally, officials document their findings, and in the case of federal managers in the U.S., communicate the results through official mechanisms such as OMB Exhibit 300.

Another approach comes from the Information Systems Management executive programs at the University of Antwerp Management School (UAMS). Based on a survey of 200 IT professionals from 14 countries, two UAMS professors released Measuring and Demonstrating the Value of IT, a book that advocates the use of balanced scorecards-a collection of frequently updated statistics that summarize key measurement areas-to help monitor IT value.

Although only a small number of professionals who participated in the survey came from public organizations, Steven De Haes, one of the book's authors, believes this sector can benefit from the lessons.

For example, if a company launches an enterprise-spanning application that's delivered on time and within budget, managers may consider it successful. If lack of training or reluctance to change work habits keep people from using the new program, however, "no business value was created at all," De Haes says.

Organizations can get help in deciding which metrics to track in their scorecards from Control Objectives for IT Information Technologies (COBIT), a framework with 34 categories. (More information available at www.isaca.org, click on COBIT.)

Key criteria

Some organizations develop their own criteria for measuring IT value. In Taipei County, in the Republic of China (Taiwan), Jang-Ming Yang, director of the Information Center, says cost effectiveness is the prime consideration. His 15-person IT staff serves 54,000 employees.

Cost effectiveness encapsulates four main ideas: the potential for technology to increase business process efficiency, reduce staff demands, enhance citizen convenience in interacting with the government, and boost system reliability and availability.

The Taipei County government uses different criteria to evaluate success in each area. To measure convenience, the county uses two indexes: one gauges the satisfaction of constituents after a new IT-backed service is put in place, while the other evaluates how well new services eliminate the need for people to leave their homes to interact with the government. The results show that because more than 600 services are now online-ranging from applications for construction permits and driver's licenses to tuition payments for government-supported schools-the IT investments are very successful.