Enterprises Struggle for IT Strategies: Telus

Small and mid-sized businesses (SMBs) are more likely than large companies to think strategically about IT projects, according to a Telus online tool designed to measure such things. But while the results suggest SMBs are ahead of the game, small companies are less likely to see substantial business value from IT projects. It sounds counterintuitive, noted Jeff Lowe, a Telus VP, when we interviewed him in November. He was describing the information generated by his company’s Business Value of Integrated Communications (BVIC) tool. Given the hullabaloo about strategic IT investments at the enterprise level, you’d think big companies would have the strategic lead. But they don’t."We’re seeing more strategic projects in SMB than enterprise," Lowe said, explaining it as the result of SMB nimbleness. "In a lot of these companies, there isn’t a formal IT organization." Small companies don’t have as many levels of bureaucracy between what passes for the technology department, and the business lines. Inevitably, "IT projects are going to be aligned with business. There aren’t these layers of complexity that you have in a large business."Normally, highly strategic IT initiatives result in better business value. But that’s not the case with the SMBs that used Telus’s BVIC calculator. Strategic or not, IT endeavours among small companies tended to yield low business value."It’s an SMB anomaly," Lowe said. "The hypothesis is it’s more of a senior, strategic crowd sponsoring these projects in SMB, but they lack the discipline to meet best practices."The BVIC ToolBest practices are the name of the game for the BVIC tool, which Telus created with help from IT research firm IDC Canada Ltd. last year. The tool provides an online questionnaire for IT professionals to fill out listing 30 best practices regarding business culture, technology prowess and operational readiness. The tool translates the answers into a BVIC score between 1 and 100, which tells users how much business value they should expect to get from their IT investments. At the time of our interview, Lowe said the average score was 58.76 among the 355 active BVIC users. Telus also provided average scores for its three broad BVIC categories: solutions, business and operations (see box).The tool is a manifestation of Telus’s increasingly familiar mantra: prove the business value of IT to customers. "We thought it’s an area in the telecom space that’s not occupied," Lowe said.The BVIC tool might help cut through the fog of IT investment value, but it certainly yields some unexpected results. For instance, despite a big push from technology vendors to attract the healthcare industry’s attention, healthcare IT projects tested through the BVIC tool scored low on strategy and low on business value. "It’s not an industry that embraces technology for a competitive advantage," Lowe said. "Like the public sector, there isn’t a tangible dollar-and-cent ROI. They define business value as improved patient care."Less surprising are the high strategy and business-value scores of IT in financial services. "You have a highly competitive market where IT is leveraged for a strategic advantage, and in a lot of cases it’s the lifeblood of the firm."IT security projects are the most popular sort to be put through the BVIC gauntlet. The least popular? "The voice and data category doesn’t get much traction," Lowe said. "They would be low BVIC as well. It’s hard to quantify the business value of commoditized bandwidth."Mixed Bag of UsersLowe said all sorts of people use the BVIC tool. "In the small-medium business area, it’s the CIO and CEO….The bigger the company, the more it gets into an IT-led discussion, and the level of interaction is more at the manager level than the executive suite." This could be bad news for technology vendors. Try as they might to win the ear of the C-suite among their enterprise customers, this BVIC data suggests vendors have failed to attain that lauded status: IT departments continue to drive technology strategies among large businesses."It’s something we’re trying to do with the tool – elevate it to that more senior audience," Lowe said. "Sometimes it starts with the IT organization. We get a chance to meet with them and talk to the business side for the first time."Meeting customers is key for Telus. Approximately 25% of BVIC tool users punch the button to invoke a meeting with a Telus consultant, who analyzes the user organization’s BVIC score and advises on next steps. The meeting is free, but it gives the carrier a foot in the door, and a chance to win future business from the user’s company.The BVIC tool may well be useful to both Telus and users, but it doesn’t provide deep analysis. "It’s a quick snapshot to get people’s heads around thinking of why they’re doing what they’re doing, whether they’re doing it the right way," Lowe said.Access the BVIC tool via www.telus.com/businessvalue. Highest Possible Score on BVIC100Average Score58.76"Solutions" average score60.14"Business" average score55.5"Operations" average score55.5

Enterprises Struggle for IT Strategies: Telus

News | 02/01/2007 5:00 am EST

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