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Re: Service-Based Finance: A key foundation to achieving real business transparency

Mark Eimer

Myles,

 

You are correct in that having IT tell the business what their price per widget is does not neccesarily help the business understand the value of IT unless they benchmark themselves against their peers in their specific industry.  The real value of IT is in it's enablement of the business and marketplace differentiation that can be created.  In Dallas where I used to work for the market leader in healthcare, IT was the market differentiator that helped to draw patients and physicians to the business.  We also showed how the cost of IT was impacting the prices that they were charging.  We benchmarked ourselves annually to show we were competitive with our peers.  The company was also a holding company and the IT costs were spread evenly across all hospitals.

 

Great article.

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Mark Eimer

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PaulMuller

Myles, this is the perfect post for the Discover Performance blog and gets to the heart of what it means to "discover performance" ie: measuring the "before" and "after" to determine if performance has indeed improved.

 

It's clearly a lot more nuanced than the title of Carr's article would have you believe (something Carr himself readily acknowledges) - for proof, I recommend that you take a look at the 152 responses on LinkedIn's CIO forum in response to the simple question "how do you define IT performance?" 

Mark Eimer

Myles,

 

You are correct in that having IT tell the business what their price per widget is does not neccesarily help the business understand the value of IT unless they benchmark themselves against their peers in their specific industry.  The real value of IT is in it's enablement of the business and marketplace differentiation that can be created.  In Dallas where I used to work for the market leader in healthcare, IT was the market differentiator that helped to draw patients and physicians to the business.  We also showed how the cost of IT was impacting the prices that they were charging.  We benchmarked ourselves annually to show we were competitive with our peers.  The company was also a holding company and the IT costs were spread evenly across all hospitals.

 

Great article.

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