THE AUTHOR:
This article will help IT business leaders understand how to demonstrate the value of IT by linking technology spending to specific business outcomes.
Learn how to use success stories and metrics to better communicate with stakeholders and improve business performance.
Translate IT Performance into Business Outcomes
The IT business value to MLEs is determined by how useful digital transformation is to business users. According to Gartner, CIOs who show how technology helps the business get 60% more funding than those who don’t.
In the industry, we often talk about technology in terms of performance rather than business outcomes. To better communicate the value of IT, we need to translate technical terms into a language of business objectives that business leaders can understand.
To do this, CIOs must first understand that revenue, cost reduction, and risk mitigation are first and foremost for business executives.
MLE business leaders often focus on specific sub-goals within these primary objectives. These sub-goals need to be recognised and highlighted. We can include competitive advantage, customer satisfaction, market share and so on as sub-goals.
In some companies, the priority business objectives may not be obvious or may differ from department to department. In such cases, CIOs should look for clues about what is important to management from a variety of sources.
They may find useful information in the company’s mission and vision, management reports, key performance indicators (KPIs), formal communications from business leadership, annual reports, and those metrics that management regularly tracks.
These values should be reviewed at least once a year, as they are subject to change.
Craft Compelling Business Value of IT
To show how information technology benefits the business, you need to tell a simple and straightforward story about how IT helps achieve goals.
There are two main types of such stories:
Support stories: These stories explain how IT makes the business faster and more efficient. They show that IT delivers the high performance and stable business operations that are required to operate around the clock.
Stories of Change: These stories describe how IT helps the business grow and change. It is important to explain how IT goes beyond simple support and makes investments that help the business grow and transform.
While stories about change seem more interesting, research shows that more than 70% of IT’s budget goes to support ongoing operations.
So, support stories are important too, and you need to show how technology helps to reduce costs and increase efficiency.
Real-World Success Stories: Computools’ Impact on Business
This section highlights real-world examples of how Computools has helped medium and large enterprises achieve their business priorities through targeted IT support and transformative changes.
These stories illustrate our commitment to boosting your business revenue growth, optimising costs, and enhancing risk management:
Measure IT’s Impact on Business Outcomes
To effectively showcase the business value of IT, businesses need to comprehend IT’s impact on key business priorities and measure both IT expenditures and their corresponding business impacts.
Unfortunately, many companies either overlook this crucial step or make mistakes. Specifically, while 67% of organisations claim they engage with key stakeholders annually to identify and validate the company’s value, only 22% manage to standardise this process. They often fail to link IT spending directly to business outcomes and key performance indicators (KPIs) that measure business value.
CIOs who attempt to link the business value of IT often choose and track metrics that highlight technology rather than business outcomes. They focus on the volume of technology provided (e.g., the number of applications solved) or how it was delivered (e.g., the number of bugs found in testing). While these technology metrics are readily available and tracked within IT, they are only significant to IT teams aiming to improve their processes.
Executives, however, are more interested in how these efforts help their teams achieve business goals, not just the resolution of requests. Therefore, CIOs must measure business value to demonstrate how IT spending contributes to specific business outcomes. Clear and consistent business metrics are essential in quantifying and showcasing the value of IT. Effective IT value metrics should reflect priorities and goals also related to revenue, cost optimisation, and risk mitigation.
Business outcome-oriented metrics (BODMs) help business teams track progress toward specific goals. CIOs should collaborate with stakeholders to understand which BODMs they use to measure business value or work together to define appropriate IT metrics. This collaboration also enables CIOs to show how existing technology outcome-oriented metrics relate to BODMs.
Computools
Software Solutions
Computools is an IT Consulting and Custom Software Development Company that designs solutions to help companies meet the needs of tomorrow. Our clients represent a wide range of industries, including retail, finance, healthcare, consumer service, logistics and more.
Create an Effective IT Metrics Framework
These steps will help in creating a robust and relevant IT metrics framework that supports strategic business objectives:
1. Identify specific metrics for each IT area directly contributing to achieving business goals. This ensures a clear connection between IT performance and business outcomes.
2. Focus on measuring IT costs and their impact on the business, including financial implications. This will help you understand the cost-benefit ratio of IT investments for businesses.
3. Measure and report on application availability and response times. Highlight how these service levels affect business operations and customer satisfaction.
4. Provide a concise summary or metrics panel on a single page. This should offer a high-level overview with the option to access detailed insights within two clicks. This format aids in quick decision-making.
5. Ensure that the measured value of IT initiatives aligns with executive priorities and goals. Executives are primarily concerned with how technology helps them and their teams achieve their objectives.
Tailor IT Value Strategies for Medium and Large Enterprises
To effectively demonstrate the IT business value in medium and large enterprises (MLEs), it’s crucial to understand the unique challenges and opportunities these organisations face.
MLEs operate on a scale that demands robust IT solutions and a strategic alignment of technology with business goals.
Here are some key considerations:
1. Scalability and Flexibility
MLEs require IT solutions that can scale with growth and adapt to changing market conditions. Implementing scalable cloud software development services, modular software, and flexible IT infrastructure ensures the technology grows with the business without significant disruptions.
2. Integrated Systems
Large enterprises often operate with various legacy systems. Ensuring seamless integration between old and new systems is essential for operational efficiency.
To streamline operations, IT strategies should focus on interoperability, data integration, and unified management platforms.
3. Enhanced Security
As MLEs deal with vast amounts of sensitive data, robust cybersecurity measures are imperative. Implementing advanced threat detection, data encryption, and comprehensive risk management protocols helps protect against breaches and ensures compliance with industry regulations.
4. Innovative Solutions
To stay competitive, MLEs must embrace innovation. You can adopt emerging technologies like AI, machine learning, and IoT to drive business digital transformation.
These technologies lead to new revenue streams, improved customer experiences, and operational efficiencies.
5. Stakeholder Engagement
Effective communication with stakeholders is key. Regularly updating executives and business leaders on IT initiatives and their impact on business outcomes helps secure ongoing support and funding.
Tailored reports that highlight the alignment of IT efforts with business priorities can strengthen stakeholder relationships.
6. Data-Driven Decisions
Leveraging data analytics to inform decision-making processes is critical for MLEs. Implementing robust analytics platforms allows businesses to gain insights from vast datasets, driving more informed strategic decisions and uncovering new opportunities for growth.
Understanding and addressing the specific needs of medium and large enterprises is essential for demonstrating the true value of IT.
By focusing on scalability, integration, security, innovation, stakeholder engagement, and data-driven strategies, CIOs can effectively align IT initiatives with business goals, ensuring that technology investments deliver measurable business outcomes.
Learn more about how Computools can help you achieve your IT and business goals. Write to info@computools.com.
Computools was selected through an RFP process. They were shortlisted and selected from between 5 other suppliers. Computools has worked thoroughly and timely to solve all security issues and launch as agreed. Their expertise is impressive.