Tips and techniques to help you calculate the business value of IT, so you can get more budget and easier buy-in across your organization.
IT’s impact on an organization can be difficult to quantify given most of the value is often around improving efficiency and reducing risk, which are not as clearly visible in dollars and cents.
However, by taking a broader view of the incredible impact that IT has on an organization and how “keeping the lights on” is truly valuable to operations, you can begin to demonstrate that value. In addition, if you can frame your team’s responsibilities and new project proposals in terms that align to the goals and metrics of Executive Leadership, you’ll find it much easier to gain buy-in and budget.
It all comes down to speaking in terms your business partners will readily understand and be able to compare across the organization. This document outlines a few key concepts to consider as you do that.
Know Your Audience
In order for your business partners to appreciate the value that IT projects can provide, it’s helpful to demonstrate how they fit within the broader strategic objectives of the business. For example, while IT leadership may be focused on the impact a project would have on the IT team’s efficiency or subsequent ability to deliver internal services, executive leadership is often more broadly focused on strategic benefits aligned with revenue growth and cross-functional business goals.
Oftentimes, these two groups are discussing the same outcomes but using different terms. Below are some examples of how you might be able to realign a technical priority into an executive priority by changing IT-related metrics into business-related metrics:
IT Leadership Priorities
- Risk (security, delivery)
Executive Leadership Priorities
- Revenue growth
- Employee productivity
- Risk (legal, compliance)
Identify the Right Business Outcome Associated with Your Project
Generally, all business outcomes fall into four general categories: cost optimization, operational efficiency, revenue growth, and risk mitigation. This section provides the tools and vocabulary to translate your project into these terms.
Hint: These often align to the maturity of your organization. If you’re in a relatively new organization that is trying to grow quickly, then speaking in terms of revenue growth will probably resonate with Executive Leadership.
In more mature organizations that have achieved stable operations, risk mitigation or cost optimization might be a better avenue for you to get buy-in. Calculating the value of “keeping the lights on” – an incredibly important remit – becomes more important in these organizations as well.
Four Categories of Business Outcomes
Demonstrate how IT investments are aligned with the growth objectives of the business.
Question to Ask: Will this project help us grow revenue or minimize lost revenue?
Examples of Revenue Growth Projects:
- Increase customer retention with improved customer experiences
- Increase website uptime resulting in more sales transactions
- Quicker deployment of new capabilities results in faster path to revenue
Demonstrate how this initiative will improve team productivity by reducing time spent on administrative
tasks in favor of more mission-critical activities.
Questions to Ask: What is the productivity impact of this project on the IT team? Can I quantify the minutes saved? Does this allow us to work on a more impactful project that we haven’t had time to prioritize?
Examples of Operational Efficiency Projects:
- Reduce the time it takes to set up and deliver an application test or production infrastructure using automation
- Eliminate the number of escalated service desk calls
- Improve the change management process to reduce the percent of failed changes and the cost of failed changes and rework
Prove how your solution will help reduce or eliminate capital and operating expenses.
Question to Ask: What costs will be avoided if I make this investment?
Examples of Cost Optimization Projects:
- Consolidating multiple tools with a single SaaS platform offering
- Reducing third-party spend by improving internal ability to digest data and understand involved risks
- Migrating to the cloud to free up large investments in legacy, on-prem infrastructure
Prove how this investment will help mitigate the business’ exposure to risk through things like outage
prevention or better compliance with industry-specific regulations. Mitigates exposure to business risks and reduces costs should if the risk is realized.
Question to Ask: Will this project improve compliance standards? Does it prevent an outage? How many
outages do we currently experience?
Examples of Risk Mitigation Projects:
- Minimizing potential downtime that could cause brand damage, missed SLA’s and reduce non-performance penalties
- Reduce the risk of data theft and subsequent damage from IP disclosures
- Improving the ability to detect and resolve incidents proactively, which results in lower downtime to the business and higher availability of services
IT’s impact on an organization can be more difficult to quantify than other areas of the business.
This datasheet will help you learn some tips and techniques to help you calculate the business value of IT, so you can get more budget and easier buy-in across your organization.
Originally published June 30, 2020. Updated November 2022