Step 4 is especially critical because no value can be accrued until those things happen. But companies that attempt to skip the earlier steps and leap right into implementation may find that they've built an IT system that delivers no value at all. If it doesn't deliver value, then the project should be modified or scrapped and the strategy and investment decisions reconsidered. In Step 5, communicating to the enterprise, organizations that manage their investments effectively should have a powerful message to convey to employees, the board of directors and outside stock analysts about what's been achieved by investing in the project. This value feedback, as shown by the top loop in the diagram, also becomes an essential tool for refining the decision process for future investments.
Performance measurement is the linchpin of the value capture process.
If value is to be captured from IT, it must have a measurable impact on the performance of the business. Before making any decisions about whether to fund a proposed IT project, you first must examine the scope of the project and break it into logical subcomponents. If you can't articulate the desired results, the value will be difficult to quantify. Next, think about the quantifiable performance measures that further describe the impact. For example, suppose a software package will increase the number of orders an order-fulfillment specialist can process each day.