6 Steps to Measure the Business Value of IT


In today’s fast-paced business environment, companies must rely on technology to stay ahead of the competition. However, investing in IT solutions is not enough. It’s essential to measure the business value of IT to justify the investment. Measuring business value helps companies determine the effectiveness of IT initiatives and make data-driven decisions to improve operations. This article outlines a six-step process to measure the business value of IT.

Step One: Define the Goals and Objectives of the IT Initiative

The first step is to define the goals and objectives of the IT initiative. Goals and objectives should be specific, measurable, achievable, relevant, and time-bound (SMART) to ensure they align with the overall business strategy.

Step Two: Identify the Key Performance Indicators (KPIs)

Once goals and objectives are established, identify Key Performance Indicators (KPIs) to evaluate the success of the initiative. KPIs should be aligned with goals and objectives and measurable. Examples include customer satisfaction, employee productivity, revenue growth, and cost savings.

Step Three: Determine the Baseline Metrics

Before implementing the IT initiative, establish baseline metrics for the KPIs. These metrics represent the current performance levels for the KPIs and provide a starting point for assessing the success of the initiative.

Step Four: Track and Analyze KPIs

Track and analyze KPIs regularly to evaluate whether the IT initiative is meeting goals and objectives. Use data analysis tools, such as charts and dashboards, to facilitate this step.

Step Five: Determine the Financial Impact

Assess the financial impact of the IT investment by calculating the Return on Investment (ROI). ROI is calculated by subtracting the total cost of the initiative from the total benefit generated and dividing the result by the total cost. Financial benefits may include cost savings, revenue growth, or other financial gains.

Step Six: Communicate the Results

Finally, communicate results to stakeholders by focusing on the benefits of the IT initiative. Communication should be concise and clear, tailored to the audience’s needs, and may take the form of reports, presentations, or other communication methods.


In conclusion, measuring the business value of IT is essential to justify IT investments. Following these six steps, companies can evaluate the success of IT initiatives, make data-driven decisions, and improve operations.

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