978-1-4799-6527-4/14/$31.00 ©2014 IEEE Development of Methodologies for Measuring IT Capability in the Information and Communication Industries Lukman Abdurrahman School of Electrical Engineering and Informatics Institute of Technology Bandung Bandung, Indonesia 33213003@students.itb.ac.id Armein Z.R. Langi & Suhardi School of Electrical Engineering and Informatics Institut Teknologi Bandung (ITB) Bandung, Indonesia suhardi@stei.itb.ac.id & azr.langi@gmail.com Abstract—There are many studies regarding the IT (Information Technology) value, however until now there are not yet any researches discussing an exact method to estimate this value. Accordingly, this study tries to present a methodology to assess this value using both qualitative and quantitative methods. The offered methodology addresses valuation of IT by means of IT value definition approach as a division of functions by costs. This valuation will be achieved by analyzing functions and costs previously, in turn, results in the intrinsic IT value. Additionally, this methodology using the Telkom data is simulated to test its accuracy. The results show that there is an alignment between the offered methodology and the case study, although there still should be improved here. Keywords— IT value, methodology, intrinsic value. I. INTRODUCTION In some industries, IT has a special room that gained particular attention as well. It has been shown empirically that IT delivers more benefits to the organization such that almost no commercial organization without involving IT in it, regardless of how big the role of IT. This viewpoint is consistent with the fact that worldwide IT spending always grows over time as shown by the Gartner survey [6]. Furthermore, there is a note that IT will well work within its environment. For that reason, there has been recognized an Information Systems (IS) terms, which is comprehended as a combination of assets and capabilities resulted from a productive use of IT [5]. In addition, IT does not create business value in an isolation environment but needs to be combined with other internal organizational factors [4]. Thus, in such organizations, IT has been viewed as strategic factors of the organizations. In view of that, we want to offer a solution for dealing with IT in order to benefit from the values contained in it, as an intrinsic value is an innate of IT capability. This paper is a follow-up study of previous studies which have been carried out by [1], [2]. Additionally, those papers had been inspired by past papers authorized by [10] and [15] addressing the relationship between IT and business performance. Essentially, this study covers the role of IT in an organization to increase the organization performance itself. This study addresses the way to estimate IT worth as strategic factors. The valuation will be observed from inner values of IT. The inner value is derived from the value implied in the IT as a result of division of the IT function by its cost. If the inner IT value is properly aligned with the business, the resulted value will be extraordinary because it is a multiplication of the inner and business value. This paper shows that the value of IT within the organization has significant roles. The remainder of paper will present the topic as follows. Section two addresses literature reviews, discussing the value definition, IT model which refers to the Resource-Based View, Section three discusses a research methodology that will be base this study. Section four is a case study performed for PT. Telekomunikasi Indonesia, Tbk. Section five is discussion and recommendation. The last is section six, which is concluding all. II. LITERATURE REVIEW A. Value Definition The value may reveal if there is an interaction among two or more systems or subsystems. One system works on the other one and vice versa, or the system works at the instigation of other systems. Why the systems would mutually operate? It may be because there is a force that drives them to work. This force is latterly called the value, usefulness, worth, benefit, and the like. In other words, this understanding can help accomplish the stage of value creation by benefiting system processes. There are various types of values such as normative value, realist value, and perceived value. The normative value is related to required value as planned previously, the realist value pertains to resulted value that is obtained from an accomplishment, and the perceived value is what consumer relatively perceives [11]. If seen from cost management viewpoints, the other types of values are the use value, i.e. the value of required function associated with the cost. Then the cost value, i.e. the all cost values dedicated to result in the item; the esteem value, i.e. the value of additional cost to pay the