Joost Schalken-Pinkster, University of Appllied Sciences Utrecht
Joost Koen, Bon Technology Ventures BV
IT does not correlate with business performance
In 2003, Nicholas Carr shook the IT world by stating that “IT doesn’t matter’’. The article states that although information technology has grown ever more critical to the success of organizations, spending on IT doesn’t seem to correlate with superior organizational performance.
The software productivity community has, up till now, not been able to improve this status quo: the software productivity community has invented many ways to improve the measurement of the IT productivity of the individual programmer or projects, but little progress has been made in measuring the business productivity of IT projects.
Improvements in measuring IT projects
The software productivity community has come a long way in measuring the productivity of IT projects. In the beginning of the 1980’s measure productivity consisted of dividing program length by effort spent. In the 1990’s it became clear in industry that measuring productivity by counting program length had serious issues (c.f. Edsger Dijkstra’s note on counting lines of code). As a result alternative measures of output became popular, of which function points became the dominant standard.
Since the dominance of function point counting many incremental improvements have been introduced: the stricter codification of counting rules (leading to the Couting Practices Manual of IFPUG), the improvement of the measurement theoretical properties of function points and improvement of the measurement scale (leading to Mk II standard of the UKSMA), application of function point counting to earlier project phases (e.g. the quick counting rules of the NESMA counting rules), adoption of the counting rules for embedded systems (the COSMIC function point standard by COSMIC) and the partial automation of function point counting (the automated function point standard by OMG).
Measuring business productivity
However these improvements have not addressed the fundamental issue that we are measuring IT productivity and not business productivity of IT projects.
We define business productivity of IT projects as the degree to which IT projects contribute to the goals of the organization. IT projects should either decrease the costs of doing business (i.e. increase efficiency) or increase the value of the outputs of the organization (e.g. a better product of better service). In the past, when trying to analyze the outputs of IT projects, too much emphasis has been placed on the efficiency part (lower costs) and too little emphasis has been placed on the effect of IT projects on the value of the organization’s services or products.
We believe that this lack of emphasis on the added value of IT projects to the outputs of an organization might have to do with the fact that the value of improved products or services are only realized when the organization and its processes also change. This makes the attribution of business value to an IT project always slightly elusive.
Still when we do not measure the true value of an IT project to a business we will never be able to ensure that our IT projects are in effect adding value to the business. And without more focus on added value to the business IT will continue to not matter to the business.
13.30 Introduction to measuring business productivity
14.30 Break-out sessions in small groups to discuss ideas
15.10 Plenary feedback of the groups
If you want to participate in this workshop, you have to register to the conference for at least the day of the workshop. If you already registered to the conference, you can attend to this workshop free of charge.
Date & time
Tuesday, October 7
13.30 – 15.30 Statendam room (B-deck)
Note! This workshop coincides with another workshop: Productivity monitoring process using FPA.