IT value contribution – We make the economic benefits of IT plannable!

The use of IT in companies has become a matter of course today. In many ways, it is the company’s nervous system that holds and connects everything together. Companies invest in and use devices, applications and services with the aim of supporting their business processes or making them available to third parties. It is worth keeping an eye on the value contribution provided by IT, as the variety of options for driving digitalization forward raises fundamental questions:

• What economic benefit does the IT measure create for the company?
• What influence does the use of IT have on the success of companies?
• Is there a connection between measures and success? Forecasting?

Today, these questions about economic benefits are summarized under the heading of IT value contribution. What constitutes value varies greatly depending on who you ask.

Illustration of the value contribution using the example of private health insurance (PKV)

If you ask a private health insurance policyholder what they consider to be a high (IT) value contribution, they will certainly say that it includes fast processing of their submitted invoices and transfer of the settlement amount to their account. The faster, the better.

From the perspective of the KV Leistung department, the value contribution of IT lies in the automated processing of submitted procedures with the aim of keeping administrative costs low.

From the perspective of an employee in the specialist area, the value lies in good user guidance in the service system. The employee’s workflow is supported by instructions on the activities to be carried out. As a result, this leads to a lower error rate in billing.

Three perspectives – three IT value contributions.

If we ask what benefit “these values” have for individuals in the context of the company perspective, simple causalities can be identified. A fast transfer in the customer relationship has been proven to lead to a high level of customer satisfactionand consequently to an increase in customer loyalty. This can be measured using the Net Promoter Score (NPS), for example.

The value-added-oriented use of IT creates efficiency and thus competitive advantages for the department. As a result, the overall profitability of the tariffs improves for the company (see illustration – increasing the dark processing rate reduces the administrative costs per invoice).

The user-friendly benefits system leads to fewer errors in benefits accounting. From the company’s point of view, this reduces testing efforts, shortens throughput times and leads to positive audit results.

Definition of IT value contribution

If we summarize the results of this illustration, we arrive at the following definition of value contribution, which we intend to use in future.

“The IT value contribution describes the contribution to the achievement of both monetary and qualitative corporate goals, which is achieved through the use of IT resources in the IT service creation process.”

Structure for IT value contribution: the reference model

For the systematic development of the value contribution in companies, we distinguish between organizations in which, firstly, demand (specialist area) and supply (IT) are separated and, secondly, the boundaries between demand and supply are dissolved.

At the same time, the corporate objectives are divided into groups according to their impact/benefit. We distinguish between:

1. Formal targets (productivity, efficiency and profitability/(excess) profit)

2. Objectives (performance targets, financial targets, management and organizational targets, social and environmental targets) and

3. Target categories (effectiveness, efficiency, security/confidentiality, integrity, availability, compliance).

With the help of a reference model (based on S. Bartsch, 2014), we classify and categorize the value contribution to a systematic and structured corporate model.

The implementation of the IT value contribution within the company is described by the IT value management method. Continue reading here.

If you want a reliable partner at your side on the way to introducing IT value contribution as a benchmark in your organization, then the BAMAC GROUP is the right place for you. We not only provide our customers with individual support, but also pursue an end-to-end approach. If you would like to know more about this, please contact us.