Nicus logo
Doodles

Partner Insights: Translating IT for Finance and the Board

Oct 10, 2019 | By Wil Cleaveland

Cost Optimization IT Cost Transparency Planning, Budgeting & Forecasting

Welcome to the latest installment of Nicus Partner Insights, our new series of syndicated ITFM content. To learn more about Partner Insights or to see the previous release in the series – a whitepaper from Nan Braun of Thavron Solutions, How to Start a Productive Conversation About IT/Business Alignmentclick here.

Today’s topic is top of mind for every CIO and IT Finance leader: translating the “language of IT” for corporate finance and executive leadership. And Nan is back again to help us tackle it with another whitepaper, Translating IT for Finance and the Board.

Inside, she discusses key sources of communication breakdown along with a detailed roadmap to overcome them – to facilitate informed decision-making, demonstrate tangible value, and nurture a strategic partnership between IT and the business.

We’ve summarized the whitepaper for you below, and you can download your copy instantly on this page here.

The Evolving Role of IT Demands Effective Communication

IT stands at a critical intersection of operational and financial information within the business. And as businesses continue to invest more and more in technology to drive growth and transformation, IT is increasingly expected to not only be stewards of technological assets but the funds used to acquire those assets as well.

To drive progress and maximize value, IT organizations can no longer work solely as execution partners to the business; they must evolve to become strategic partners too.

But if IT doesn’t have a clear framework to communicate across the business, the insights delivered to non-technology leadership are often undecipherable – or worse, they’re never communicated at all.

Why IT Struggles to Be Understood

In the past, IT organizations haven’t had a strong need to communicate back to the business. Leadership and consumers used to view technology as a commodity, and IT was simply seen as necessary overhead to deliver that commodity.

Consequently, the exchange of information between IT and the business has historically been one-sided. The business would make technology decisions in a vacuum, then pass those decisions off to IT to be executed – without any discussion around strategy or intent.

IT organizations spent decades being responsible for only the “what” and “how” behind technology decisions, but never the “why,” and today, as a result, they’re often unequipped to manage a mutually beneficial dialogue with business partners.

In other words, the need for effective IT-business communication has grown dramatically – along with the size of technology budgets – but IT’s capacity to glean, translate, and deliver insight has remained largely unchanged.

Learning the “Common Language” of Value

To finally close the communication gap between technology leaders and business leaders, IT must learn to speak the “common language” of business value, which requires two things:

  1. Understanding the four principles of business value – In every business, there are four principles that dictate how value is defined and measured (Core-of-Value, Conservation-of-Value, Expectations Treadmill, and Best Owner). This methodology has been widely accepted after being presented by Tim Koller, Richard Dobbs, and Bill Huyett of McKinsey Research, and it’s explained further starting on pg. 5 of Nan’s whitepaper.
  2. Translating IT activities to each principle of value – Simply understanding how the business perceives value is just one half of the equation. Next, technology leaders must combine that newfound understanding with their existing knowledge of IT operations and finance – refocusing analysis and discovery efforts, translating insights into simple terms for rapid consumption, and framing discussions on all current and future IT activities around the four principles of value.

Download Your Copy of the Whitepaper

The full whitepaper takes a deep dive on everything you’ve read about here. Inside, you’ll learn:

You can get your copy of Nan’s Partner Insights whitepaper here: Translating IT for Finance and the Board.

Get actionable insights and updates about ITFM in your inbox.