Being honest, this is a tricky topic. If anybody ‘googles’ what value is, or how to measure value, you get a lot of hits and options. However, the most generic example that I probably relate to is:

The Measure of value is the function of money that enables the values of different goods and services to be compared; it is also referred to as a unit of value. Simply put, Value = Benefits divided by Cost.

So, if we stick with that notation of:

The value of an Investment in Technology = the benefits generated from that Technology divided by the cost of the delivery of that Technology

Then it is very clear that no investment would be made unless it generates value that serves a business outcome. Analysing this a bit further, then the question has to be asked. Why, when we perform our independent reviews of the value that organisations get from investments in technology, do the majority of clients that we work with say: ‘The value we are getting from our investment in technology could be greater, but we’re not sure how to increase that value’

In the reviews we deliver, we always insist that we meet the business consumers of technology, i.e., those likely to both feel the pain and gain real value from any investment. In the focus groups, we talk through a series of questions related to the experience they receive. How it works for them, what happens when things go wrong, how change is brought about, what is critical to them, etc. We form a picture of the experience they receive, and we wrap this up with the critical killer question… How would you rate your experience of using ...? We ask the business consumers to score their perception of the value of the technology service they receive, scoring between 1 and 10, where 1 is that you are actively taking steps to avoid using what you are given, as it is not good enough, and 10 you love it so much you can’t wait to come back tomorrow and use it again!

The feedback we get in relation to this is typically mixed, with different persons from different business units having different experiences on which they draw, and of course each with different expectations and experience from other companies or services provided that they may have had outside of the current work environment, either with other organisations or in their own personal life.  The lower the score, the more clearly a warning bell rings about the value obtained from any investment.

At one end of the spectrum, there are business consumers that love the experience they get; things seem to work ok for them, and they have very few problems. However, at the other end of the spectrum, there are others who have experienced poor change, poor service management, and, generally, technology that does not align with how they want to work or with where they see their business unit heading strategically. So why does this disconnect happen?  

We often see people tolerate and accept poor performance and low value from technology supplied. Sometimes it is low expectations, a history of under-delivery and inflated expectations. Sometimes users do not know what it can do for them. However, the biggest issue we find is that the Digital Transformation Strategy is written in a way that is not aligned with the business's desired outcomes and needs.  At CoStratify, we believe that strategy must be aligned and signed off by the business to deliver the outcomes they need. Technology is here to serve the business’ needs.  Every statement and initiative in a modern adaptive strategy must be challenged in this way.

Where we see organisations being really successful in the provision of technology-enabled services, they have a business-aligned Strategy that is written, aligned, and matched to the required budget. Not only that, but the operating model includes the capability to adapt the strategy to continually meet the needs of the business and the budget. When a CFO or Finance Director sees a request for an increased technology investment budget, they can fully understand the outcome that will be achieved from that increased investment, as it has defined business outcomes.

In the current climate of cost challenges, with the business having to adapt, change weekly, monthly, and reshape. The strategy needs to respond and change at a frantic rate to meet these ever-changing scenarios and demands.  Perhaps it is now time to check your strategy to see if it is business-aligned and adaptive?   

At CoStratify, we believe that the organisations that will survive, grow, and reinvent themselves are those with business-aligned, adaptable technology strategies; we build strong evidence to underpin and support these strategies. Please get in touch for assistance in creating a business-aligned, flexible technology strategy.  

So in answer to the original question… How do we measure the value of Investment in Technology to the business? I would suggest organisations perform the benefits-over-cost analysis and let us know in the comments below what you think. 

If you are struggling with this, you may want to read my previous blog post on Total Cost of Ownership, as the number that goes into the equation must be a TCO number, not just your budget. Hence why we say to everyone: a proper TCO baseline is the starting point for everything to move forward.

Thanks for taking the time to read this post.