Unwrapping Gartner's 7 Rules for Demonstrating the Business Value of IT
IT teams can accelerate their business’s growth by enabling staff to do more with fewer resources. And in today's digital world, organizations must strategize IT initiatives to stay relevant within a landscape of ever-evolving tech.
That said, it can be a challenge for teams to reinforce the value of IT to their business leaders. IT teams and business leaders are prone to talking past one another when it comes to understanding broader business needs and the specific benefits of IT initiatives. Hence, it’s often a challenge for ITOps pros to secure the resources they need from leadership.
The thing is, IT is wildly beneficial for countless organizations. So, how do you lock down budget to keep your IT department healthy and productive? Well, according to a recent article from Gartner, there are 7 rules for demonstrating the value of IT in business.
In this post, we’ll unpack these rules and offer our take on the most valuable IT functions in businesses.
7 Rules for Demonstrating the Business Value of IT
1. IT stakeholders determine value
IT teams know they carry value. However, when securing funding for more efficient tooling, communicating that value requires teams to align their initiatives with those of the business.
According to the Gartner article, when determining value “without a clear line of sight to business priorities, IT is likely to stay focused on delivering technology or platforms, rather than meeting business objectives, benefits or outcomes.”
If you want business leaders to recognize the genuine value of your team, discuss and share projects, security initiatives, and other IT-related activities regularly. Communicate how (and with which tools) your ITOps and SecOps teams routinely attack ongoing external risks. By including business leaders here, you’ll show the value of IT and its importance will be better understood when funding requests roll around.
2. Outcomes are valued differently by others
It’s no secret leadership often ranks value based on budget instead of on resource need. ‘How much will this cost?’ usually outweighs ‘how significantly will this affect security, efficiency, what have you?’ While your IT team may see the benefit of specific activities, leadership may not agree.
We recommend your team regularly report value-based statistics to leadership. For example, let’s say you want to implement a third-party solution to help elevate an already sparse IT staff, provide stakeholders with a cost comparison and demonstrate how the new tool will help increase overall resources for your IT team. Stakeholders want to see a return on their investment, so emphasize this in your presentation to them.
3. Craft a double narrative focused on running and growing the business
IT helps orgs operate safely and efficiently. You know it. We know it. But does your leadership know it?
When demonstrating the value of IT, your team should build two distinct narratives: One highlighting operation (running the business), and one highlighting transformation (growing the business).
As stated in Gartner’s list, “IT can enable the business to run (operate) and change (grow/transform), but its value for each objective is perceived differently by stakeholders, so value measures for ‘run’ and ‘change’ initiatives should differ. If one initiative covers both, highlight both the differences and the interdependencies in any related communication.”
In other words, IT should emphasize the following narratives:
Revenue should be positioned to highlight transformative growth
Expenses should be positioned to highlight operational need
Fortifying these two distinct narratives shows business leaders the cost per value of IT. This tactic also allows leadership to see their return on investment (ROI) which will likely (automatically) increase the value of IT in their eyes.
Say you’re pitching a cloud security software solution to the finance department to help mitigate external threat risks. Using tools like this OWASP risk assessment calculator can help illustrate your potential ROI. Stakeholders will be more privy to valuing an expense if it helps increase revenue and decrease business risk.
4. Measure business outcomes instead of IT lift
Gartner’s list states, “Platform, systems, and infrastructure performance make up elements of IT production, they do not represent quantifiable value to the business stakeholder.” In other words, develop and document the intended outcome with the business stakeholder.
It may take a little more work, but Gartner recommends staying away from complex metrics or technical lingo to explain IT value. Often, those tactics can bore or alienate your stakeholder.
Instead, communicate in as simple a way as possible, the worth of the financial risk. How do you do that, exactly? Well, offer up value-based and easy-to-understand benchmarks. Communicate effectively, but steer clear of detailed charts, graphics, and technical concepts. Show less to get more.
5. Link costs to business services IT helps deliver
In Gartner’s words, “Value conversations must include both cost and benefit [...] Cost the value delivered at the business outcome level (e.g., cost per seat of an application or cost per transaction of critical business services). Include both costs and benefits in all project proposals to determine net value.”
Always communicate the expenses and costs associated with a solution when asking for funding. Don’t hide daily production and operating costs, third-party solution costs, or other miscellaneous IT expenses.
For business leaders to feel confident IT expenses won’t supersede revenue growth, they need to see what they’ll be spending (especially during revenue stagnation, budget cuts, and layoffs). Work on establishing an open dialogue when it comes to IT spend and there won’t be any surprises left to hurt your chances.
6. Keep language simple
Gartner states (and we agree) that IT can prove its value by getting to the point in business-related lingo, instead of relying on technical jargon. Stakeholder buzzwords include risk, operating, profit, revenue, expense, and cost. Use those words, too. Put yourself in the stakeholder’s shoes – after all, they call the funding shots.
If you don’t know how to make your case in leadership’s language, ask for a quick tutorial. How does leadership measure IT’s value impact? Instead of talking past one another, communicate directly, simply. Again, your audience knows business better than they know tech, so speak their language.
7. Show stakeholders how IT benefits them directly
In any effective sales practice, you want to show buyers how much easier your product will make their lives. When asking for funding, IT is kind of a salesperson. How can you show your “buyer” or business leader that what you do has a direct impact on their work?
Gartner proposed that you "make spend justification and value definition a collective effort between IT and key stakeholders.” If you include financial gatekeepers in your initiative early on, your digital strategy has a better chance of receiving the funding it needs.
Again, IT teams must communicate the value, costs, and key benefits of the proposed solution so business leaders can see the full picture. Also, whenever you can prove your solution will save time and money, you’re on your way to a win since those are usually the main components of a stakeholder’s bottom line.
Wrapping up Gartner’s business value of IT best practices
In the end, you want to set a precedent for open, direct communication; full disclosure; and proof of direct benefit to the business or organization. Stay away from focusing on how much easier your life will be and prioritize how you can help your business run more smoothly, more cost-effectively, and grow more stable and lucrative.
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