Bridging the Trust Gap in Measuring Business Value

Harvard Business Review Analytic Services (HBR-AS) recently released a webinar and pulse survey titled The Transparency Imperative: How Visibility Into Technology Spending Drives Business Value. Mark Schwartz, enterprise strategist at AWS; and RJ Hazra, Senior VP and CFO of Equifax Global Security and Technology; joined Apptio CEO Sunny Gupta on this webinar to discuss the results of the survey.

Every company is becoming a digital company and making technology investments to drive better business outcomes. A digital-first strategy requires both business and technology leaders to fundamentally change the operational model for technology. Today, business and technology teams work together to embrace agile development to move from project-based to product-based delivery and accelerate their journey to the cloud. This requires actionable insights into technology spending and measuring its value for the organization.

Accelerating delivery of business value

As business leaders emerge into the post-pandemic world, they have two significant opportunities.

The first is to build infrastructures to accelerate the adoption of new technologies and new ways of working. Those who can respond to changing priorities with the right technology, financial management, and decision-making systems and processes, including quantifying the economics of cloud migration, will gain competitive advantages.

The second is to continue the pace of digital innovation—embracing the product versus project mindset. The complexity of technology—managing legacy resources, new agile developments, and the journey to the cloud—is enormous. These transformations do not happen without measuring value, costs, and consumption. Unfortunately, many leaders are discovering there is a prominent data disconnect inside their organizations, posing a challenge to improving business agility and innovating to compete.

Disconnected data undermines agility

Over the past six months, Apptio sought to understand how visibility into technology spending correlates to business agility by sponsoring HBR-AS research. The Transparency Imperative: How Visibility into Technology Spending Drives Business Value ⁽¹⁾ dives deeply into why and how business leaders can develop processes and metrics to measure value. The analysis uncovers the central data point that ties everything together: importance versus confidence. The research shows business leaders know that clean, strong data to measure value is imperative for them to be agile. However, leaders simultaneously lack confidence in the data that they are using to make technology spend decisions.

In the HBR-AS survey ⁽¹⁾, 92% of respondents rated the business value of technology as important or very important. Still, only 62% were confident or very confident in their information about this category (see fig. 1). Data sets are vast and sit in source systems that typically do not correlate (e.g., organizations must marry cloud and financial data with labor data to construct a P&L view). But trusted decisions do not have to rely on 100% data accuracy. Apptio helps our customers quickly reach a level of data accuracy that supports repeatable decisions and defines the surface areas for further data cleanup.

According to the HBR-AS survey ⁽¹⁾, CEOs and IT leaders’ top strategic business objective is to accelerate and measure customer value. Apptio believes you cannot have a value conversation without IT cost transparency. Cost and value are two sides of the same (IT Financial Management) coin—organizations must quantify the business value of new development through objectives and key results (OKRs) and a value management framework. Many organizations, including our customers, are moving to a product-based delivery model where they’re continuously delivering value, and the IT and business teams are a lot more integrated. Organizations are tying business value metrics (e.g., reducing costs, creating new revenue streams, driving employee productivity) to technology investments.

Data-driven insights deliver trusted decisions

Over the past 18 months, Apptio has seen executives and organizations use data-driven insights to navigate the disruption of the covid pandemic. As RJ Hazra put it during the webinar, “knowing what drives our cost structure lets us tie spend back to market and revenue implications so that we can make decisions quickly.” With so much uncertainty, technology leaders had to rapidly replan and reforecast spend, delivering spending cuts while simultaneously investing in remote work. As many parts of the world are shifting back to in-person work, business leaders are realizing that existing processes need reevaluating. The HBR survey ⁽¹⁾ captures this sentiment by showing how organizations rate new metrics and data-based processes as their most important technology budgeting challenge.

The Transparency Imperative: How Visibility into Technology Spending Drives Business Value survey contains crucial information that enables executives to support their teams as they work toward closing the transparency gap through collaboration and technology.

_{1 Harvard Business Review Analytic Services. (2021). The Transparency Imperative: How Visibility into Technology Spending Drives Business Value.}