Aligning IT success with business outcomes.
It's easy to get caught up in the buzz around Gen AI, cloud and data analytics. The tech is impressive. The teams are talented. The ambition is real. But if all this doesn't drive business value, it risks becoming just another IT project.
This isn't to say tech doesn't matter—far from it. Tech plays a more central role in creating competitive advantage than ever before. But it can't do that unless it ties its capabilities to the business strategy and goals.
For example, when organisations implement Gen AI, there's often an initial focus on how advanced or innovative the technology is. However, the fundamental success metric is whether it has a positive impact on key business areas. Does it enhance customer satisfaction? Does it streamline operations and reduce costs? Does it help open new revenue streams? The value of Gen AI must be evaluated by its contribution to the business's overall strategy, not just by its technical achievements.
Understanding how IT value (outcomes) drives business value (business goals and financial performance) matters. Thinking beyond delivery and technical rationale is essential. Reporting anything less than a business outcome to business executives may, unfortunately, ensure that IT leaders do not secure a meaningful seat at the business strategy table. It might even perpetuate the chasm between business and technology.
Understanding the difference between IT value and business value is key.
Business and IT departments with differing goals and priorities must establish effective communications when exploring rapidly advancing technology and meeting business needs. It requires continuous focus on aligning IT and business value.
However, this is where many organisations struggle. They measure IT success in technical terms—uptime, performance, defects—without translating that into commercially relevant outcomes. Business stakeholders are not concerned with the intricacies of the tech stack. They care about what it means for revenue, efficiency and growth.
IT VALUE OF TECH
IT value encompasses the technical impact, including cost savings, risk reduction, and future cost avoidance. These are important and measurable. For example:
1. Cost savings:
Licencing costs: is the solution lowering software licensing costs?
Running costs: does it result in lower runtime infrastructure and headcount costs? Cloud migration often makes a difference on this front. Is it reducing the running cost per transaction for the most common transactions?
Support costs: is the solution less maintenance-intensive than what exists? Does it require less attention because it is more stable or observable?
2. Risk reduction:
InfoSec risk: are we less vulnerable? Is there a reduction in the quantum or severity of infosec incidents?
Non-compliance risk: Does the solution comply better with regulations? Does it make it easier to spot incidents of non-compliance?
3. Future cost avoidance:
Obsolescence costs: is the solution reducing the footprint of the obsolete or soon-to-be obsolete technologies in your application landscape? Is it reducing our dependence on near-extinct skills? Is it reducing the number of technologies no longer supported by their providers?
Underperformance costs: is performance, uptime, or scalability improving? Is it better prepared to support business growth? Are we avoiding the cost of eventualities such as business impact due to sluggish performance?
BUSINESS VALUE OF TECH
Business value goes a level higher. It's about improving performance across the organisation, enhancing efficiency, accelerating revenue, and gaining competitive advantages. For example,
1. Operational efficiency & improved productivity:
Process enhancements: is the solution helping to improve the efficiency and effectiveness of day-to-day business operations or quicker decisions resulting in increased productivity and profitability.
Cost savings: is it contributing to lowering costs associated with business processes resulting from streamlined workflows and improved data management? Is it helping to reduce the user cost per engagement and cost per sale?
Resource allocation: Does it help improve resource utilisation (people or capital)?
2. Usage & adoption:
Usage frequency: Is it improving user interactions, increasing user satisfaction and loyalty, and helping drive revenue growth through increased retention?
Adoption rate: how effectively is it turning more potential customers into paying customers and increasing lifetime value?
Customer experience: is it improving the number of customers who recommend your company's products or services to others based on their experiences (Net promoter score)?
3. Driving innovation & incremental revenue:
Speed to market: is the solution creating greater business agility, allowing the organisation to adapt rapidly to changing business needs and respond quickly to new market demands?
Product development: is it helping the organisation innovate new products and services or improve existing ones? Is it enabling rapid scalability and flexibility, allowing businesses to innovate and experiment with less risk?
Competitive advantage: is it likely to contribute to a strong market position and a sustainable competitive advantage, such as market share and product profit margins?
So, how do you ensure Business-IT value alignment?
Bring Business and IT stakeholders together to map out how the initiative connects to business goals. Ask:
What problem is the business solving?
Who will use the solution?
How does it change the way work gets done?
What metrics will tell us it's working?
Who is accountable for monitoring, maintaining and growing its value?
Run a 'Value Flow Mapping' workshop to identify the links between an initiative's IT performance, its impact on business goals and financial success, and the metrics to measure business value.
This exercise builds a shared understanding of value, encourages cross-functional ownership, and ensures everyone is aligned on what success looks like – technically and commercially.
We also need to recognise the importance of aligning local and central needs. IT and business teams often work well together at a local level, but central business units are more removed. They only see the impact when things go wrong. That's why continuous engagement, not just consultation at the start, is so important.
If you want to shift perception – from IT being a service provider to being a strategic enabler – you need to bring forward a compelling story of value. Not just what was delivered, but what changed the business because of it.
The reality is that Business leaders don't invest in tech. They invest in outcomes.
