Technology leaders have continuously struggled to define, quantify and communicate how IT impacts non-technical business outcomes. Most CIOs are focused on operational metrics that may not effectively convey the value IT brings to the organisation. As a result, communication between IT and executive leaders routinely fails to establish a consensus due to a mistranslation of value from service provider to business consumers. A successful value conversation needs to be tailored to the audience, include measurable business results and be aligned with the company mission.

Communicating with stakeholders

Maintain Customer Focus

Your value proposition is ultimately driven by the customer’s assessment of how well the proposed solution will benefit their business priorities.  Before proposing an initiative, it is essential to identify the target stakeholders and work with them to understand their business needs. Once you have a complete understanding of the stakeholder and their business outcomes, the next step is to validate that the intended technology delivers value that is aligned with customer priorities. Be sure to maintain ongoing dialogue with stakeholders to calibrate and sustain strategic alignment.

Communicate in the Customer’s Language

An understanding of customer challenges should be at the forefront of your communication efforts. Value should be presented to stakeholders in a structured business case format using language that the target audience can easily understand to avoid any confusion related to the recommended technology and expected results. The metrics used to measure success also need to be communicated clearly to stakeholders and should enable easy interpretation while avoiding the need for technical translation. Business cases should be tailored to stakeholders based on their specific business interests and area of operation within the company.

The stakeholders’ financial partners should also have a full understanding of the business case, value proposition, and business outcomes to remove any funding roadblocks once the initiative has been approved. Financial gatekeepers should be actively engaged in the definition of outcomes and value measurement from the beginning of the business case creation process.

Building Credibility

Leverage Metrics to Create Buy-in

The value of IT should be focused on metrics that track business outcomes defined by stakeholders as opposed to metrics that measure operational efficiencies or technical throughput. Metrics should be well documented and aligned with desired, mission-related results outlined in the business case. The unit of measure needs to be based on a transaction since IT is essentially delivering a product/service that the end consumer should be willing to pay for. Metrics should be trended over time to track the value being created before and after implementation.

A “progressive disclosure” approach to reporting will allow for easy interpretation of results with the capability to increase granularity to answer questions as they arise. Reporting should be targeted to the identified stakeholders and focused on the business outcomes defined in the business case.

Cash is King – Dollars over Efficiency

Focusing on outcomes that involve reducing costs or increasing revenue will help create a more compelling story than improving operational efficiencies since the value is easier to quantify and more readily understood. Although the priority is the impact to the bottom line, be sure to list all intangible benefits including process improvements and better organizational synergy to help solidify your message.

Business Outcomes

Prioritisation of Business Outcomes

The prioritisation of initiatives should be directly correlated to the amount of value each one will generate for the company. Prioritization should be mission-focused, and the approach should be consistent to ensure that each business case has been properly vetted. Stakeholder engagement is imperative to calculating ROI/Price for Performance and ensuring that the value created supports the targeted business outcome.

Run vs Grow

It is best practice to separate business outcomes into two distinct categories. The first category is “Run” which includes business outcomes related to ongoing business to operations. The second category is “Grow/Transform” which includes initiatives that help expand business capabilities and drive innovation.  Each category should have its rules for justification, investment and measuring the value added to business outcomes.

Things to Consider

IT value conversations should initially focus on executive leaders and include key performance indicators while avoiding the use of operational level units of measure. This helps centre the dialogue around business outcomes that are important organizational success. Your business will need to internally assess how and when to alter these best practices to accommodate the specific needs of your operating model and industry. Always ask whether a business case or metric helps to clearly communicate IT value.