In today’s evolving business landscape, CEOs are increasingly investing in digital technology to drive growth. This increased focus on technology necessitates CIOs to effectively communicate the value IT brings to the table. As per Gartner, CIOs who adeptly convey the business impact of information technology can expect to sustain funding levels that are 60% higher than those who do not.
This article outlines a strategic approach for CIOs to articulate the business value of IT, thereby ensuring sustained funding and reinforcing their pivotal role within the organization.
How can CIOs successfully communicate IT value story
Step 1: Understanding Stakeholder Priorities
To bridge the gap between technology and business outcomes, CIOs must first comprehend the key priorities of their primary executive stakeholders. These priorities are typically aligned with the organization’s overarching business objectives, which commonly revolve around:
- Revenue Generation for profit-driven organizations or Value Creation for nonprofit entities and government agencies.
- Cost Optimization: The systematic reduction of costs to enhance profitability and overall value.
- Risk Identification, Quantification, and Remediation.
CIOs should delve deeper into these broad objectives to identify specific subgoals that pertain to their IT initiatives.
For organizations where priorities are not uniformly evident, clues can be found in corporate mission and vision statements, board reports, KPI scorecards, leadership communications, annual reports, and metrics reviewed by the executive team at defined intervals.
CIOs must document these stakeholder objectives and periodically validate them with the executive team, as they may evolve over time.
Step 2: Crafting Compelling Value Stories
The second step involves constructing narratives that highlight how IT has contributed to achieving business goals. These value stories can be categorized into two main types:
- Run Value Stories: These stories emphasize how IT enables the business to operate more efficiently, enhancing performance levels and sustaining operations.
- Change Value Stories: These narratives showcase how IT has expanded capabilities, delivering new opportunities for growth and transformation.
It is crucial to illustrate how technology has reduced costs and improved the efficiency of critical business activities. For maximum impact, focus on large-scale programs and consider grouping smaller initiatives with larger, multiphased endeavors.
Step 3: Identifying IT-Influenced Business Metrics
To fortify the IT value story, CIOs must understand how IT activities impact critical business priorities. This involves measuring the costs of IT initiatives and evaluating their resulting business impact.
Business-outcome-driven metrics (BODMs) are paramount in tracking progress toward concrete business goals. CIOs should collaborate with stakeholders to identify and define relevant IT-related BODMs. Moreover, they should establish impact metrics for each IT area contributing to business objectives, prioritize cost measurement, and include application service-level commitments for availability and response time.
Conclusion
Effectively communicating the business value of IT is imperative for CIOs to secure funding and maintain their authority within the C-suite. By understanding stakeholder priorities, crafting compelling value stories, and leveraging relevant business metrics, CIOs can bridge the gap between technology and business outcomes, demonstrating the pivotal role of IT in driving organizational success.
Source: Gartner
Featured image credit: Freepik
