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Companies around the world are looking for ways to improve business results while reducing costs. To this end, IT organizations are under constant pressure to increase the value of delivered applications by improving quality, performance, availability and time-to-market while raising IT productivity and reducing costs. In response to these IT challenges, executives are now setting an important new business strategy to improve quality, reduce costs and align IT with business goals.
Business technology optimization (BTO) is the IT initiative to improve and align technology and business performance. BTO promotes a systematic approach to quality management for IT, with the ultimate goal of delivering and maintaining higher-quality applications at a lower cost. Many IT organizations have turned to HP solutions for BTO as a fundamental IT strategy. Still, IT budgets and spending patterns are being scrutinized, and chief information officers (CIOs) demand that IT investments—even for BTO—be justified, and that they align with the success of the business. Many are challenged with the following questions:
- What is the relationship between IT investment and business value?
- How can I translate strong intuitive feelings and great results to quantifiable benefits?
- How can I quantify “managed” business risk versus alternative “no-action” strategies?
- How can I persuasively communicate the BTO value proposition across the organization?
To help answer these questions, HP initiated a collaborative return on investment (ROI) assessment research program with experienced customers across eight vertical industry segments. Our goal was to develop a customer-centric ROI framework and process to help customers understand, quantify and communicate the IT and business value of BTO. These concepts are important for not only those looking to justify future BTO investments, but also for those who want to better manage, control and improve value delivered with BTO.
For the purposes of this study, we focused on our quality management suite of BTO products—a subset of the full BTO suite, which also includes IT governance and application management. The key takeaways of this study are:
- Total benefit spans organizations
As illustrated in Figures 1 and 2, businesses realize value when IT delivers applications that enable important business processes. The total value of these applications is measured by the benefit they bring to the business unit, usually linked to achievement of business goals and measures of improved effectiveness such as productivity, revenue, customer satisfaction, risk and cost. At the same time, IT incurs costs associated with delivering and managing these applications. By applying HP quality management products to the IT process, these organizations realize benefits of improved quality management and quality results, improved application performance and availability, faster time-tomarket, and lower delivery and support costs. Improved IT effectiveness leads to delivery of better applications, more quickly, which leads to even greater value to the business.
Benefits are quantifiable through straightforward approach
Understanding BTO value starts with a strong understanding of a company’s business context: business imperatives, business applications, IT imperatives and implementation of HP offerings. This approach leverages “ROI scenarios” (value propositions broken down into small, concise descriptions of value) to help customers quickly identify the most relevant and meaningful areas of value. When these scenarios are interlocked with the customer perspective, customer-specific business value is uncovered. Finally, total benefit is measured by summing the value associated with the most relevant scenarios.
- Benefits are significant and customer-validated HP worked closely with customers to measure value. Results include significant IT productivity gains (greater than 90 percent in some areas), significant business productivity gains and millions of dollars of protected/ increased revenue.
This paper provides insight into these findings, including the scope and nature of a systematic ROI approach, and selected case examples from our research. We hope this information will help you: Understand the overall value of HP quality management offerings, measure the total benefit, improve alignment between IT and the business, and establish a benchmark from which you can continuously measure IT process improvement.
HP quality management ROI model
Partnering with customers on the best approach to measure ROI, we found that effectively assessing the total value of HP offerings requires discovery in four key areas of business perspective: business imperatives, IT imperatives, business applications and implementation of HP offerings.
Once we understood a customer’s business context and identified the relevant ROI scenarios, we could quickly identify areas of value, as illustrated in Figure 3. We also found that ROI scenarios helped address the complexity and uncertainty associated with collecting relevant data.
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