Are You Getting Value For Money?

Are You Getting Value For Money?

We all want to feel that we’re getting value for money from the things we buy. But when you control large budgets on behalf of demanding stakeholders, it’s always going to be your first (and arguably, most) important question.

The concept of “Value for Money” (VFM) is an important one to IT service provision, with more organisations questioning whether their IT delivery is good value. Unfortunately, in the digital world of ever-evolving technology, value can be really complicated to measure.

It is possible, however, to measure in-house, outsourced and hybrid delivered services for VFM. The different delivery options present unique challenges; whether they resolve around presumed (internal targets) or contracted (SLAs) obligations, the full value can only be determined and measured, when cost or commercial factors are combined with several aspects of service quality, resulting in a two-dimensional view of Value.

Value for Money – a simple definition

Using over 20 years of IT industry benchmarking experience, we’ve been able to develop the following simple definition for “Value for Money”:

The Price (Charge) or Cost for a defined set of service(s) is equal to or lower than the peer group
AND the Service Quality for these services is equal to, or higher than the peer group.

This removes any ambiguity from defining VFM and ensures subjective views are replaced with hard facts on whether VFM is achieved or not.

Defining an appropriate peer group is a whole separate challenge!

Determining Value for Money

With its Value for Money definition in mind, we at ImprovIT can very quickly determine if existing internally or externally delivered services provide value. This can also be applied to a future scenario where the service(s) required can be “modelled” against best practice to aid strategic decision making.

To see some examples of organisations that we’ve worked with to assess VFM, please visit our website. And if you’d welcome an independent assessment of how well your IT services are providing Value for Money, please get in touch with us today.
ImprovIT are an independent business and technology consultancy. We were founded by former colleagues of Gartner, IBM and HP to help senior IT leaders make the critical decisions that will maximise their technology investments. We’re completely independent and impartial specialists in the use of IT Measurement, Modelling and Benchmarking.