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Val IT: A little-known IT governance framework that may save you money

Kristen Caretta, Associate Editor

When the number of IT projects at San Diego-based The ICW Group started getting out of hand, governance director Angelo Esposito needed to find a way to quantify and assess them -- and turned to IT governance when many process management strategies fell short.

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"The project sponsor would come in and tell us the benefit, but there would be no follow-up [after the project was completed] -- no analysis of the expected benefit with the actual benefit," Esposito said.

Enter Val IT, an IT governance framework designed to guide an organization through IT investment, risk assessment and value realization -- bringing transparency and good decision making into IT.

Released by the IT Governance Institute (ITGI) in 2007, the first version of Val IT was a succinct 32-page white paper. In 2008, it evolved into a 116-page version-two PDF. Val IT provides guidelines for tracking the actual value of a project, even as the value and business need for that project changes.

After some initial research, Esposito began the ongoing Val IT implementation process within his organization, a 700-employee insurance provider, in November 2008 -- and has never looked back, extremely confident in the little-known, infant framework.

"It's been certified in its use, and I'm most comfortable with that," Esposito said. "With the economy the way that it is, we can't afford to invest in something that hasn't been proven. The IT Governance Institute is very well respected, and we didn't want to be trailblazers."

What is Val IT?

Val IT is divided into three domains: value governance, portfolio management and investment management. According to the Val IT frameworks, realizing business value is not about acquiring technology, but about using IT in conjunction with the business, business processes, individuals' work and competencies and organizational structures.

Responding to those needs and enabling the enterprise to realize optimal value with acceptable risk and affordable costs, Val IT provides prescriptive processes, guidelines, goals, maturity models and activity descriptions.

Val IT is a framework focused on the enterprise point of view of IT governance, highlighting value -- unlike COBIT, a framework that focuses on execution, according to Steve Romero, IT governance evangelist at CA Inc. Val IT focuses on architecture and delivery, "decision making at the strategic level," he said.

All too often organizations finish a project and move on to the next one, never looking back to make sure the project was a success, said Robert Stroud, international vice president of the IT Governance Institute. Val IT works to fill in the gaps that business process management and project portfolio management can't necessarily fill.

"We don't do such a good job determining value in IT," Stroud said. "Val IT introduces the business part of the IT decision making and provides domains to go about investments."

Terry Chrisman, global IT governance leader for GE Capital, turned to Val IT when projects weren't turning out as well as expected, even with a formal project methodology in place.

Using his project and portfolio management (PPM) tool to track projects, understand available resources and manage finances yielded positive tracking results but still left a gap in analytics. "The PPM tool can't tell you if a project was a success -- there's no analytical work," Chrisman said. "The business case is made on assumptions."

And without updating the business case to keep up with current economic situations, budget constraints and changes in vision, "things that start off good can end up not so good if you don't have ongoing analysis along the way," Chrisman said.

In one instance, the business was placing unmanageable demands on IT, to the point where nothing was getting done, Chrisman said. After implementing the presets, some of the "big picture items" of Val IT, IT realized that the projects it was being asked to do were outside the company's goals.

"We analyzed the projects, shortened the delta between what was requested and what didn't fit, and many projects turned out to be more business focused than IT focused," Chrisman said.

"From there we sought more effective management and developed a central steering committee of the CIO, CFO and CEO, to review projects for value."

As a result, projects were up and running more quickly, everyone had a better understanding of the project scope, each project had a well-developed and efficient business case, and IT wasn't fielding every request.

"There was at least a 50-60% decrease in demand placed on IT," Chrisman said.

Let us know what you think about the story; email editor@searchcio-midmarket.com.

This was first published in April 2009

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