The CIO’s New Currency: Proving Business Value Beyond Tech
For decades, the Chief Information Officer’s success was measured in uptime, lines of code, and successful project deployments. Those metrics still matter, but today, a CIO who can’t articulate their department’s contribution to the bottom line is quickly losing relevance. A staggering 87% of CEOs prioritize digital initiatives, but only 38% believe their IT investments are delivering the expected returns – a gap the modern CIO must bridge.
From Cost Center to Value Driver
The shift is undeniable. CIOs are no longer simply technology leaders; they are expected to be strategic business partners. “CIOs have to act and operate more as businesspeople and less just as technologists,” says Eric Johnson, CIO at PagerDuty. This means moving beyond reporting on what IT did – the number of servers patched, the applications launched – and focusing on why it mattered. What impact did those activities have on revenue, customer satisfaction, or risk reduction?
Quantifying the Intangible
Measuring business value isn’t always straightforward. While some benefits are easily quantifiable – cost savings from cloud migration, for example – others are more nuanced. Joe Locandro, global CIO at Rimini Street, emphasizes the importance of tracking both cash and non-cash benefits. Reducing technical debt, mitigating cyber risks, and improving operational efficiency all contribute to value, even if they don’t immediately translate into increased revenue. Locandro advocates for frameworks that categorize value drivers, such as risk reduction, operational efficiency, and innovation.
The Rise of Outcome-Based Reporting
The key to demonstrating value lies in shifting from activity reporting to outcomes reporting. Orla Daly, CIO at Skillsoft, stresses that her team focuses on the “expected impact” of initiatives, tracking KPIs aligned with productivity enhancements, customer experience, and revenue growth. Marco Bill, CIO at Red Hat, exemplifies this approach by focusing on metrics like order cycle time, directly linking IT improvements to customer satisfaction and operational efficiency. Regular, transparent Quarterly Business Reviews (QBRs) are crucial for communicating these results to stakeholders.
Beyond KPIs: The Importance of Context
While KPIs are essential, they shouldn’t exist in a vacuum. Bill emphasizes the need to adapt measures to reflect evolving business priorities and market shifts. Kristen Costagliola, CTO of Syncro, highlights the importance of tracking project timelines, performance, and ROI, but also acknowledges the difficulty of directly correlating IT initiatives to revenue. Instead, she focuses on indicators like customer adoption and feature usage.
Building Bridges: IT and the Business
Successful value reporting requires close collaboration between IT and other departments. Mark Sherwood, CIO at Wolters Kluwer, meets monthly with the CEO to review the value proposition and leverages customer satisfaction surveys to gauge IT’s impact. He champions the idea of IT as a “value center” rather than a “cost center,” fostering a culture of proactive contribution. Crucially, Sherwood emphasizes the importance of a strong relationship with the finance organization and the CFO to define and measure value effectively.
The Role of Business Relationship Managers
Bridging the communication gap between IT and the business often requires dedicated resources. Wolters Kluwer utilizes a team of business relationship managers who can speak both “IT” and “business” languages, ensuring that IT initiatives are aligned with organizational goals. This dedicated function helps translate technical achievements into tangible business benefits.
Looking Ahead: AI, Automation, and the Future of IT Value
As technologies like AI and automation become increasingly prevalent, the CIO’s role in demonstrating value will only become more critical. Automation, for example, isn’t valuable simply because it reduces manual effort; it’s valuable because it frees up resources for more strategic initiatives, reduces errors, and improves customer experience. The ability to articulate these benefits – and to proactively identify new opportunities for value creation through emerging technologies – will be the defining characteristic of the successful CIO of the future. The focus will shift from simply doing IT to driving business outcomes with IT. Gartner’s research consistently points to this trend, highlighting the need for CIOs to become “business shapers” rather than simply “technology implementers.”
What strategies are you implementing to demonstrate the business value of IT within your organization? Share your experiences and insights in the comments below!
