Gartner Research

Smarter Spending: Invest in Business Outcomes

Published: 22 August 2019

ID: G00388079

Analyst(s): Robert Naegle , Sanil Solanki

Summary

Top-performing CIOs deliver value by managing IT costs strategically and programmatically. Gartner’s digital value optimization plan can help CIOs achieve the mission of the enterprise by shifting the cost management focus from cost cutting and cost optimization to value optimization.

Table Of Contents
  • Key Question
  • Opportunities and Challenges
  • How This Report Will Help

Foreword

  • Acknowledgments

Executive Summary

  • Section 1: Align to Value
  • Section 2: Plan and Prioritize
  • Section 3: Execute and Measure
  • Section 4: Iterate and Innovate

Section 1: Align to Value

  • Partner With Stakeholders
    • Partner IT With Stakeholders to Define What Is Valued
    • Identify the Pain to Resolve or Solve the Pain
    • Be Sure That Stakeholders Own the Return Part of the ROI Analysis
    • Let Consumers, Not IT, Define Value — Technologies Are Parts, and Are Not the Unit of Value
  • Productize Solutions
    • Elevate IT Thinking and Execution to a Business-Valued Services Approach
    • Think Products, Not Projects: IT’s “Products” Are Not About What IT Builds But What the User Values
    • Learn What the Stakeholder Is Asking For and What Is Required to Meet the Stakeholder’s Needs
  • Document the Desired Outcome
    • Build a Business Case and Plan for Strategic Investments
    • Ask, “What Will Success Look Like to the Stakeholders?”
    • How Will Success Be Measured by the Business?

Section 2: Plan and Prioritize

  • Prioritize Outcomes to Enable the Organization’s Mission
    • Reach Agreement With Stakeholders and Leadership on Which Investments Are Made in What Priority
    • Prioritize the Needs to Their Impact of Business Outcomes — Value Creation, Cost/Efficiency Optimization and Risk Mitigation
  • Fund Based on Return or P4P
    • Fund Most Impactful Incomes First — ROI for CTB and P4P for RTB
    • Calculate the Cost Basis for New Projects Using IT Financial Management (ITFM) Practices
    • Differentiate Product/Project Funding (CTB) From Operational Funding (RTB)

Section 3: Execute and Measure

  • Validate and Justify Changes to the Plan Iteratively
    • Check Back Often to Ensure That the Work in Process Still Addresses the Need/Pain
    • Be Agile IT Delivery
    • Alert Stakeholders and Business Leaders of Any Changes to the POR
  • Measure Impact in Business Outcomes and Performance to Plan
    • Track How Projects Evolve and Value Is Delivered
    • Report Performance to Plan and ROI or P4P Realized
  • Communicate and Socialize Value Delivered
    • Convey What You Are Planning, What You Are Doing and What You Did

Section 4: Iterate and Innovate

  • Refine the Plan to Optimize Value
    • Evaluate Constantly and Tune the Direction and Objective of Projects and Deliverables
  • Refocus Resource Utilization
    • Listen and Respond to Customer Needs, and Be Agile and Flexible
    • Ensure That IT Deliverables Have the Maximum Possible Impact on Targeted Outcomes
    • Refocus as Needed and When Justified by Business Requirements and Priorities
  • Realign Strategies to Changing Market and Economic Dynamics
    • Adapt Dynamically to New Needs and New Priorities
    • Adjust Prioritizations and Disposition Investments Quickly
    • Be Willing and Able to Terminate Projects Quickly
  • Conclusion

Further Reading

  • Related Content
  • Gartner Executive Programs Reports
  • Core Research
  • Articles
  • Peer Conversations

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