- Rapid changes in today’s market require rapid, value-based decisions, and organizations that lack a shared definition of value fail to maintain their competitive advantage.
- Different parts of an organization have different value drivers that must be given balanced consideration.
- Focusing solely on revenue ignores the full extent of value creation in your organization and does not necessarily result in the right outcomes.
Our Advice
Critical Insight
- Business is the authority on business value. While IT can identify some sources of value, business stakeholders must participate in the creation of a definition that is meaningful to the whole organization.
- It’s about more than profit. Organizations must have a definition that encompasses all of the sources of value or they risk making short-term decisions with long-term negative impacts.
- Technology creates business value. Treating IT as a cost center makes for short-sighted decisions in a world where every business process is enabled by technology.
Impact and Result
- Standardize your definition of business value. Work with your business partners to define the different sources of business value that are created through technology-enabled products and services.
- Weigh your value drivers. Ensure that business and IT understand the relative weight and priority of the different sources of business value you have identified.
- Use a balanced scorecard to understand value. Use the different value drivers to understand and prioritize different products, applications, projects, initiatives, and enhancements.
Member Testimonials
After each Info-Tech experience, we ask our members to quantify the real-time savings, monetary impact, and project improvements our research helped them achieve. See our top member experiences for this blueprint and what our clients have to say.
9.0/10
Overall Impact
$68,499
Average $ Saved
50
Average Days Saved
Client
Experience
Impact
$ Saved
Days Saved
Victoria Mutual Building Society
Guided Implementation
9/10
$31,499
N/A
The feedback aligned with what we are currently doing but provided some enhancements to the process which I appreciated. Can't say I had a worst pa... Read More
Omaha Public Power District
Guided Implementation
9/10
N/A
N/A
Understood our objectives, knowledge and experience
Federal Home Loan Bank of Chicago
Guided Implementation
9/10
$123K
50
BDO Canada LLP
Guided Implementation
9/10
$50,000
50
LPL Financial
Guided Implementation
10/10
$123K
5
Cole is extremely knowledgeable and helpful in providing the right lens to how to think about the process. I look forward to our future dialog to ... Read More
Data Recognition Corporation
Guided Implementation
10/10
N/A
N/A
Great discussion, lots of insight from Cole.
Build a Value Measurement Framework
Focus product delivery on business value–driven outcomes.
ANALYST PERSPECTIVE
"A meaningful measurable definition of value is the key to effectively managing the intake, prioritization, and delivery of technology-enabled products and services."
Cole Cioran,
Senior Director, Research – Application Development and Portfolio Management
Info-Tech Research Group
Our understanding of the problem
This Research Is Designed For:
- CIOs who need to understand the value IT creates
- Application leaders who need to make good decisions on what work to prioritize and deliver
- Application and project portfolio managers who need to ensure the portfolio creates business value
- Product owners who are accountable for delivering value
This Research Will Help You:
- Define quality in your organization’s context from both business and IT perspectives.
- Define a repeatable process to understand the value of a product, application, project, initiative, or enhancement.
- Define value sources and metrics.
- Create a tool to make it easier to balance different sources of value.
This Research Will Also Assist:
- Product and application delivery teams who want to make better decisions about what they deliver
- Business analysts who need to make better decisions about how to prioritize their requirements
This Research Will Help Them:
- Create a meaningful relationship with business partners around what creates value for the organization.
- Enable better understanding of your customers and their needs.
Executive summary
Situation
- Measuring the business value provided by IT is critical for improving the relationship between business and IT.
- Rapid changes in today’s market require rapid, value-based decisions.
- Every organization has unique drivers that make it difficult to see the benefits based on time and impact approaches to prioritization.
Complication
- An organization’s lack of a shared definition of value leads to politics and decision making that does not have a firm, quantitative basis.
- Different parts of an organization have different value drivers that must be given balanced consideration.
- Focusing solely on revenue does not necessarily result in the right outcomes.
Resolution
- Standardize your definition of business value. Work with your business partners to define the different sources of business value that are created through technology-enabled products and services.
- Weigh your value drivers. Ensure business and IT understand the relative weight and priority of the different sources of business value you have identified.
- Use a balanced scorecard to understand value. Use the different value drivers to understand and prioritize different products, applications, projects, initiatives, and enhancements.
Info-Tech Insight
- Business is the authority on business value. While IT can identify some sources of value, business stakeholders must participate in the creation of a definition that is meaningful to the whole organization.
- It’s about more than profit. Organizations must have a definition that encompasses all of the sources of value, or they risk making short-term decisions with long-term negative impacts.
- Technology creates business value. Treating IT as a cost center makes for short-sighted decisions in a world where every business process is enabled by technology.
Software is not currently creating the right outcomes
Software products are taking more and more out of IT budgets.
38% of spend on IT employees goes to software roles.
Source: Info-Tech’s Staffing Survey
18% of opex is spent on software licenses.
Source: SoftwareReviews.com
33% of capex is spent on new software.
However, the reception and value of software products do not justify the money invested.
Only 34% of software is rated as both important and effective by users.
Source: Info-Tech’s CIO Business Vision
IT benchmarks do not help or matter to the business. Focus on the metrics that represent business outcomes.

IT departments have a tendency to measure only their own role-based activities and deliverables, which only prove useful for selling practice improvement services. Technology doesn’t exist for technology's sake. It’s in place to generate specific outcomes. IT and the business need to be aligned toward a common goal of enabling business outcomes, and that’s the important measurement.
"In today’s connected world, IT and business must not speak different languages. "
– Cognizant, 2017
CxOs stress the importance of value as the most critical area for IT to improve reporting

N=469 CxOs from Info-Tech’s CEO/CIO Alignment Diagnostic
Key stakeholders want to know how you and your products or services help them realize their goals.
While the basics of value are clear, few take the time to reach a common definition and means to measure and apply value
Often, IT misses the opportunity to become a strategic partner because it doesn’t understand how to communicate and measure its value to the business.
"Price is what you pay. Value is what you get."
– Warren Buffett
Being able to understand the value context will allow IT to articulate where IT spend supports business value and how it enables business goal achievement.
Value is...
Derived from business context
Enabled through governance and strategy
The underlying context for decision making
A measure of achievement
Determine your business context by assessing the goals and defining the unique value drivers in your organization
Competent organizations know that value cannot always be represented by revenue or reduced expenses. However, it is not always apparent how to envision the full spectrum of sources of value. Dissecting value by the benefit type and the value source’s orientation allows you to see the many ways in which a product or service brings value to the organization.

Financial Benefits vs. Improved Capabilities
Financial Benefits refers to the degree to which the value source can be measured through monetary metrics and is often quite tangible. Human Benefits refers to how a product or service can deliver value through a user’s experience.Inward vs. Outward Orientation
Inward refers to value sources that have an internal impact and improve your organization’s effectiveness and efficiency in performing its operations.Outward refers to value sources that come from your interaction with external factors, such as the market or your customers.
Increase Revenue |
Reduce Costs |
Enhance Services |
Reach Customers |
---|---|---|---|
Product or service functions that are specifically related to the impact on your organization’s ability to generate revenue. |
Reduction of overhead. They typically are less related to broad strategic vision or goals and more simply limit expenses that would occur had the product or service not been put in place. |
Functions that enable business capabilities that improve the organization’s ability to perform its internal operations. |
Application functions that enable and improve the interaction with customers or produce market information and insights. |
See your strategy through by involving both IT and the business
Buy-in for your IT strategy comes from the ability to showcase value. IT needs to ensure it has an aligned understanding of what is valuable to the organization.
Business value needs to first be established by the business. After that, IT can build a partnership with the business to determine what that value means in the context of IT products and services.
The Business |
What the Business and IT have in common |
IT |
---|---|---|
Keepers of the organization’s mission, vision, and value statements that define IT success. The business maintains the overall ownership and evaluation of the products along with those most familiar with the capabilities or processes enabled by technology. |
Business Value of Products and Services |
Technical subject matter experts of the products and services they deliver and maintain. Each IT function works together to ensure quality products and services are delivered up to stakeholder expectations. |
Measure your product or services with Info-Tech’s Value Measurement Framework (VMF) and value scores
The VMF provides a consistent and less subjective approach to generating a value score for an application, product, service, or individual feature, by using business-defined value drivers and product-specific value metrics.

A consistent set of established value drivers, sources, and metrics gives more accurate comparisons of relative value
Value Drivers | Value Sources | Value Fulfillment Metrics |
---|---|---|
Broad categories of values, weighed and prioritized based on overarching goals | Instances of created value expressed as a “business outcome” of a particular function | Units of measurement and estimated targets linked to a value source |
Reach Customers | Customer Satisfaction | Net Promoter Score |
Customer Loyalty | # of Repeat Visits | |
Create Revenue Streams | Data Monetization | Dollars Derived From Data Sales |
Leads Generation | Leads Conversation Rate | |
Operational Efficiency | Operational Efficiency | Number of Interactions |
Workflow Management | Cycle Time | |
Adhere to regulations & compliance | Number of Policy Exceptions |
A balanced and weighted scorecard allows you to measure the various ways products generate value to the business
The Info-Tech approach to measuring value applies the balanced value scorecard approach.
Importance of value source |
X |
Impact of value source |
= Value Score |
Which is based on… |
Which is based on… |
||
Alignment to value driver |
Realistic targets for the KPI |
||
Which is weighed by… |
Which is estimated by… |
||
A 1-5 scale of the relative importance of the value driver to the organization |
A 1-5 scale of the application or feature’s ability to fulfill that value source |
+ |
Importance of Value Source |
X |
Impact of Value Source |
+ |
Importance of Value Source |
+ |
Impact of Value Source |
+ |
Importance of Value Source |
+ |
Impact of Value Source |
+ |
Importance of Value Source |
+ |
Impact of Value Source |
= |
Balanced Business Value Score |
Value Score1 + VS2 + … + VSN = Overall Balance Value Score
Value scores help support decisions. This blueprint looks specifically at four use cases for value scores.
A value score is an input to the following activities:
- Prioritize Your Product Backlog
- Prioritize Your Project Backlog
- Rationalize Your Applications
- Categorize Application Tiers
Estimate the relative value of different product backlog items (i.e. epics, features, etc.) to ensure the highest value items are completed first.
This blueprint can be used as an input into Info-Tech’s Build a Better Backlog.
Estimate the relative value of proposed new applications or major changes or enhancements to existing applications to ensure the right projects are selected and completed first.
This blueprint can be used as an input into Info-Tech’s Optimize Project Intake, Approval, and Prioritization.
Gauge the relative value from the current use of your applications to support strategic decision making such as retirement, consolidation, and further investments.
This blueprint can be used as an input into Info-Tech’s Visualize Your Application Portfolio Strategy With a Business Value-Driven Roadmap.
Gauge the relative value of your existing applications to distinguish your most to least important systems and build tailored support structures that limit the downtime of key value sources.
This blueprint can be used as an input into Info-Tech’s Streamline Application Maintenance.
The priorities, metrics, and a common understanding of value in your VMF carry over to many other Info-Tech blueprints
Transition to Product Delivery
Use Info-Tech’s Value Calculator
The Value Calculator facilitates the activities surrounding defining and measuring the business value of your products and services.
Use this tool to:
- Weigh the importance of each Value Driver based on established organizational priorities.
- Create a repository for Value Sources to provide consistency throughout each measurement.
- Produce an Overall Balanced Value Score for a specific item.
Info-Tech Deliverable

Populate the Value Calculator as you complete the activities and steps on the following slides.
Limitations of the Value Measurement Framework
"All models are wrong, but some are useful."
– George E.P. Box, 1979
Value is tricky: Value can be intangible, ambiguous, and cause all sorts of confusion, with the multiple, and often conflicting, priorities any organization is sure to have. You won’t likely come to a unified understanding of value or an agreement on whether one thing is more valuable than something else. However, this doesn’t mean you shouldn’t try. The VMF provides a means to organize various priorities in a meaningful way and to assess the relative value of a product or service to guide managers and decision makers on the right track and keep alignment with the rest of the organization.
Relative value vs. ROI: This assessment produces a score to determine the value of a product or service relative to other products or services. Its primary function is to prioritize similar items (projects, epics, requirements, etc.) as opposed to producing a monetary value that can directly justify cost and make the case for a positive ROI.
Apply caution with metrics: We live in a metric-crazed era, where everything is believed to be measurable. While there is little debate over recent advances in data, analytics, and our ability to trace business activity, some goals are still quite intangible, and managers stumble trying to link these goals to a quantifiable data source.
In applying the VMF Info-Tech urges you to remember that metrics are not a magical solution. They should be treated as a tool in your toolbox and are sometimes no more than a rough gauge of performance. Carefully assign metrics to your products and services and do not disregard the informed subjective perspective when SMART metrics are unavailable.
"One of the deadly diseases of management is running a company on visible figures alone."
– William Edwards Deming, 1982
Info-Tech’s Build a Value Measurement Framework glossary of terms
This blueprint discusses value in a variety of ways. Use our glossary of terms to understand our specific focus.
Value Measurement Framework (VMF) |
A method of measuring relative value for a product or service, or the various components within a product or service, through the use of metrics and weighted organizational priorities. |
Value Driver |
A board organizational goal that acts as a category for many value sources. |
Value Source |
A specific business goal or outcome that business and product or service capabilities are designed to fulfill. |
Value Fulfillment |
The degree to which a product or service impacts a business outcome, ideally linked to a metric. |
Value Score |
A measurement of the value fulfillment factored by the weight of the corresponding value driver. |
Overall Balanced Value Score |
The combined value scores of all value sources linked to a product or service. |
Relative Value |
A comparison of value between two similar items (i.e. applications to applications, projects to projects, feature to feature). |
Info-Tech offers various levels of support to best suit your needs
DIY Toolkit
“Our team has already made this critical project a priority, and we have the time and capability, but some guidance along the way would be helpful.”
Guided Implementation
“Our team knows that we need to fix a process, but we need assistance to determine where to focus. Some check-ins along the way would help keep us on track.”
Workshop
“We need to hit the ground running and get this project kicked off immediately. Our team has the ability to take this over once we get a framework and strategy in place.”
Consulting
“Our team does not have the time or the knowledge to take this project on. We need assistance through the entirety of this project.”
Diagnostics and consistent frameworks used throughout all four options
Build a Value Measurement Framework – project overview
1. Define Your Value Drivers |
2. Measure Value |
|
Best-Practice Toolkit |
1.1 Identify your business value authorities. 2.1 Define your value drivers. 2.2 Weigh your value drivers. |
|
Guided Implementations |
Identify the stakeholders who should be the authority on business value. Identify, define, and weigh the value drivers that will be used in your VMF and all proceeding value measurements. |
Identify the stakeholders who are the subject matter experts for your products or services. Measure the value of your products and services with value sources, fulfillment, and drivers. |
Outcome:
|
Outcome:
|