How can organizations effectively measure the productivity gains derived from various IT projects? What specific metrics, KPIs, or methodologies can be employed to quantify the impact of IT initiatives on overall business performance? Are there industry-specific benchmarks or best practices for measuring IT productivity? How can organizations overcome challenges in attributing productivity improvements directly to IT projects, especially in justifying it to CEO/CFO?

We measure using the concept of ROI and adherence to the business case used to approved it,  whether an Operational cost reduction or revenue enabler/protection, regulatory compliance, platform de-risking amongst others.

For every technology investment, list the benefits when the funding is sought.  Track the benefits a year after the technology investment is implemented / in use, to validate that the investment ROI was realized.  Facilitate the discussion between the person/team/group who sponsored the investment and the CEO/CFO etc.  Holding sponsors accountable for the investments takes the burden off the IT team that made the investment happen.

There are some investments that are just cost of doing business.  The ROI for toilet paper is probably a hard one, but bathrooms have it.

In technology there are some investments that just need to be done: replacement of end user devices, software updates due to obsolescence and therefore cyber security risk management, capacity increase in network bandwidth etc. etc.  Some investments are linked to many factors such as hiring and employee retention, example is that some developers may prefer a Mac and will not work without a Mac.  For organizations that aspire to have diverse workforce it feels silly to limit the hiring pool of candidates because glassdoor.com is full of comments about poor technology at firm XYZ because in year 2024 developers, even those writing mobile apps for iOS, cannot use a Mac.
  

I measure efficiency of IT projects the same way of any other initiatives.  Most projects we are running are not solely "IT" projects and we are calculating ROI, benefits (hard and soft) using same methodology than any other initiatives.  If a project does not show SMART (specific, measurable, atteinable, realistic, timely) objectives and don't end up with actual advantages across the organization, we should not work on it.  This being said, there are initiatives such as improving back-ups who may not be driven to a specific KPI internally, so we are looking into how those projects are improving our posture to increase redundancy or security.  In those cases, there is always a standard (like ISO27001), a clause in your cyberinsurance clause or an improvement for users who can in fact be tangible and that you can refer to.

Gartner has tons of material on success outcomes and how to measure it, so this is probably a good start, otherwise, I would start by understanding what are my CEO/CFO concerns or which goal they want to achieve and start from there as you want to have them on board with your initiatives and how you report those projects to them

This research on IAM value and metrics from Rebecca Archambault provides great examples to get started https://www.gartner.com/document/4418099

Hello,
KPIs are related to the company's core business and the milestones to be achieved for each project. For example, you can find many studies about the introduction of Microsoft's CoPilot, as the Redmond company conducted research and published findings as "promotions" of the benefits (see KPIs, ROI) of adopting CoPilot.
Of course, you can also look at user-centric metrics such as surveys and feedback to gauge user satisfaction with IT services, the percentage of users who adopt the new technology or system (without enforcement), and industry-specific benchmarks such as ITIL and COBIT.