tween UDEs, pointing from the causing UDE to the resulting UDE. The
process of fCRT building starts with
putting the leading UDE on top. UDEs
that are the causes of the leading UDE
are then picked from the list and put
below it and connected through the
causality arrows. The process continues by adding more UDEs below the
UDEs already in the tree that are causing them and subsequently adding the
required causality arrows. The bottom
UDEs of the fCRT are not associated
with other UDEs causing them; they
are thus considered the root causes
for the software value gap.
This analysis identifies the two
main root causes: lack of effective focus on value and lack of an effective IT
resources management methodology.
Root causes of the software value
gap are not just the result of IT division management practices but the
behavior and norms within the organization as a whole. Reducing the
gap means creating more value to
companies and other organizations
through better response to their business needs. This greater value can be
realized by addressing two options:
select the most valuable IT systems
for development and maintenance
(effectiveness) and enhance productivity in the IT division (efficiency).
Here, we outline a comprehensive approach that enables a breakthrough
toward reducing the software value
gap through existing resources.
Moreover, it synergistically complements the conventional approaches
outlined earlier.
Focus on Value
Since demand for software solutions
significantly exceeds supply, IT divisions are, by definition, permanent
bottlenecks in their organizations and
hence unable to satisfy all specified
corporate IT needs.d Unfortunately,
selection of projects for inclusion in
the realization portfolio typically reflects the organizational power of the
requesting division or the length of
stay of the request in the to-do queue
rather than real economic value for
the organization.
d Permanent bottlenecks are resources that
will remain bottlenecks, since demand is
extremely large.
Figure 1. fCRT of the software value gap.
Root causes
Leading UDE
Software
solutions
development
does not create
enough value
Software solutions
productivity
inadequate
Software
solutions
in realization
portfolio do not
maximize value
Cost of
IT division
too high
Excessive
ineffective time
of IT developers
Delivered
software solutions
are abandoned
often
Lack of
effective selection
mechanism for
portfolio selection
Lead times
too long
Software
solutions
meet needs
only partially
Requirements
not specified
properly
Internal
customers’
involvement
not sufficient
Lack of effective
focus on value
Lack of efficient
and effective
IT resources
management
methodology
Figure 2. Focusing matrix for selecting software solutions (not to scale).
Excluded
from current
realization
portfolio
C
100 – 500
50 – 100
5
0
– 1
0
0
10 – 50
10
–
5
0
5
– 1
0
>
5
> 10
E
A
D F
B
G
Ease
($ millions)
($ millions)
Value
> 500
> 1
0
0