We all sit in someone else's value chain as, in return for money, we deliver value in one form or another. Similarly, the value the IT function delivers takes the form of services that support the users, which in turn enables them to deliver business value to the stakeholders (although the users do not pay for the service - a problem in itself).

Anyway, the value stakeholders receive is thus proportional to the value the IT function delivers so the CIO needs to look at the supply end of their value chain to establish whether each link along the chain is playing a value amplification role.

So who sits upstream of the IT department in value creation terms? It doesn't take much thought to realise that the HR function, recruitment agencies, procurement and technology vendors all have roles to play.

Talent management is critical to an IT department's success while demand outstrips supply in respect of e-skills and this will become even more acute over time.

HR functions have some way to go before they start to deliver real value to the IT function. Very few understand the resource and instead recruitment becomes an exercise in buzzword bingo whereby the in-house recruiter tries to match the terms on the resumé with those in the job specification.

Where talent is scarce a more innovative approach is required but few HR functions can manage this, leading to value destruction.

The last two links in the chain listed above are increasingly people-related: as we buy more services and less technology, the people element becomes more important. The technology vendors also have the issue of ensuring that their offerings are aligned with the business needs of the users and the needs of the CIO.

Account managers who do not understand the business reasons may strike it lucky because the CIO takes on a paternal role in the relationship, but most CIOs want the value to come from the vendor.

Procurement officers generally focus on cost rather than value management, which can often lead to value dampening. Challenging the vendor for functional benefits rarely comes into it. Focusing on cost is easier and this is a position shared by many CFOs who struggle with the CIO's attempts at value articulation.

I've painted a bleak picture but experience tells me there are serious shortcomings in the supply chains of many IT functions.

About the author

Ade McCormack advises business leaders on IT matters. Visit his blog at www.auridian.com