Aeries Technology

IT’s Guiding Hand Across the Business Value Chain

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Anji Rasakonda

Anji Rasakonda

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In the present organizational landscape, there has been a significant surge in reliance on IT. As we increasingly embrace digitization, the role of IT has transitioned from a mere luxury to an absolute necessity. Amid this rapidly advancing technological transformation, businesses are faced with the dual imperative of not only capturing new markets but also preserving their current customer base and upholding a competitive advantage. However, these ambitious objectives will remain far from achievable unless IT takes on a central role in meeting the requisites of the business.

A comprehensive strategy for gauging, monitoring, and achieving business results is crucial for effectively communicating the value of IT to the business. We refer to this as the Business Value Articulation (BVA) framework.

Business value can be divided into two dimensions: tangible and intangible. Tangible aspects encompass financial performance indicators such as revenue, profit, costs, market capitalization, and more. These quantifiable elements contribute significantly to the business’s overall value. Equally vital are the intangible elements, which include factors like brand equity, competitive positioning, consumer utility of products or services, the enterprise’s social reputation, and more. The consolidation of all these factors not only enhances business performance but also augments the enterprise’s potential. Any endeavor or strategy that enhances these tangible or intangible factors falls under the umbrella of BVA.

Business Value Articulation (BVA)

How IT Empowers Businesses to Attain Their Objectives through Strategic Alignment

Historically, IT metrics have often lacked the ability to significantly impact critical strategic choices, primarily due to a lack of direct alignment between Key Performance Indicators (KPIs) and the actual business needs. Consequently, understanding what to measure to achieve the intended results becomes paramount. This process commences with outlining the desired outcomes, which is then followed by outlining sub-process level objectives. These objectives serve to facilitate the realization of broader business goals by fine-tuning the intersections of applications, infrastructure, and touchpoints within the business process services. Identifying the “white spaces” in the business process flow streamlines the task of optimizing the portfolio effectively.

When evaluating business value, the ‘business case’ for any proposed new project incorporates metrics like Return on Investment (ROI) and Cost-Benefit analysis. The crux of communicating business value lies in the capacity to associate each application’s functionality with a relevant business KPI and quantify the potential impact of the IT-driven change. In numerous instances, stakeholders are confident that a particular functionality adds value to the business, but the challenge often lies in the absence of clarity and the means to measure the resultant shift in the specific KPI. Failing to translate qualitative business improvements into quantifiable measures, either in terms of business parameters or monetary value, places IT in a predicament where due recognition might be lacking. This situation also influences business decisions; a well-presented business case could attract more investment than one that’s less articulately presented, even if the latter holds a higher potential to deliver value.

To address this, providing an estimated Leverage Ratio for the lifecycle of IT projects becomes essential. Consequently, to genuinely impact business outcomes, it becomes imperative for IT professionals to possess a strong understanding of business processes in addition to their technical acumen.

Unveiling the Essence of Enhanced Business Value

Let’s delve into the essentials of conducting business with an enhanced value proposition and effectively conveying it. The primary source of insights into business value, coupled with a transformative prerequisite, resides in a deep understanding of the business itself. The greater the familiarity of the IT team with business processes, the more likely they are to generate promising ideas for enhancements.

Residing within the realm of operational efficiency, the prevalent approach involves establishing Service Level Agreements (SLAs) for individual tasks and ensuring IT team alignment to manage the support ecosystem. Yet, transcending this operational efficiency horizon unveils a substantial realm, giving rise to an inherent anticipation of the IT team functioning as a catalyst for business value augmentation.

Aeries Technology’s BVA Framework Enabling
IT-Business Integration

Aeries’ BVA framework facilitates the connection between IT and business goals using a three-step methodology when addressing an identified and defined challenge that requires the actualization of an idea:

  1. Designing the Change Enabler: This involves formulating a solution on paper to tackle the issue or challenge, whether it’s related to performance improvement, automation, and more.
  2. Computing the Engineering Impact: This outlines the potential outcomes of implementing the solution, encompassing aspects like decreased manual workload, augmented resource availability for other tasks, and more.
  3. Delivering the Targeted or Exceeding Expectations Outcome with Measured Monetary Gains: This produces the achieved outcome and compares it with the initially defined challenge. Additionally, it offers data points showcasing the extent of saved effort (expressed in percentages or dollar terms) and/or the amount of cost reduction/added revenue generated by the IT solution for the client’s organization.

This BVA framework aids in the formulation, implementation, and longevity of business performance by fostering the alignment between IT and business objectives.

Conclusion

The shift from traditional application development to aligning IT with business-focused metrics offers IT organizations a transformative chance to reshape their role in the broader business landscape. Integrating outcome-driven metrics empowers IT professionals to provide valuable insights that influence vital decisions and improve communication between departments. Embracing this change turns IT into innovation architects, paving the way for a future where IT goes beyond facilitation, becoming a catalyst for lasting business prosperity.

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