Value is in the eye of the consumer — that is, of the business stakeholder — not of the provider, or IT department. CIOs who successfully communicate the business value of information technology will maintain 60% higher funding levels than their peers who don’t.
Communicating well is easier said than done. CIOs tend to communicate value in terms of technological performance or operations, not in terms of business returns . To more effectively communicate the business value of IT, CIOs must translate technology factors into the language of business outcomes that stakeholders understand and care about.
To do that, CIOs must first understand how business stakeholders define value. Usually it is based on their highest priority business objectives. The three most common objectives are:
Revenue (in profit-driven organizations) or value creation (for nonprofit organizations and government agencies)
Cost optimization, or the programmatic reduction of costs to improve profitability and value
Risk identification, quantification and remediation
Business leaders often emphasize certain subgoals that fall under one of these common umbrellas, requiring CIOs to translate a more granular goal. Examples related to revenue include competitive differentiation, customer satisfaction (as reflected through sales or renewals), market share and so on.
Some business areas may emphasize a fourth objective, such as environmental, social and governance (ESG); diversity, equity and inclusion (DEI); customer services; or, in healthcare, patient care, etc. CIOs should evaluate whether a potential fourth priority is truly separate and if IT activities can directly affect outcomes.