As IT leaders consider adopting a TBM framework—or need to get more from their existing TBM Office—the focus needs to shift from today’s cost-centric goals to value realization. As we covered in our previous blog, value realization is achieved by either improving top-line revenue or bottom-line profitability for the whole company. But to get to true value realization, companies often need to reinvest run reduction savings derived from a TBM framework into initiatives that move the needle for the company overall.
It can seem counterintuitive for companies to think about increasing spending levels after they uncover savings through TBM, given the cost-centric focus today. But that’s the route to value realization—reinvesting in projects and solutions that will drive change for their business. Significant and measurable changes like increasing revenue, decreasing costs, improving gross margin, reducing customer turnover, increasing productivity and expanding into new markets, channels and geographies.
To help companies achieve value realization, Advocate has adopted a process we call “Actions to Outcomes”—translating projects and activities into progressively more business outcomes by connecting to the company’s business strategy. But how do IT leaders identify what matters more to their organization? How do they convince decision-makers to reinvest cost savings?
That’s where Advocate comes in. We recently completed an Actions to Outcomes exercise with Gannett Fleming in Philadelphia. We began working with Gannett Fleming in early 2018 on a successful network transformation to increase bandwidth without adding costs. At that point, the company had started thinking about implementing a TBM framework, and after attending our 2018 Insiders Summit, the company’s Vice President & Chief Technology officer, Kevin Switala, was motivated to move forward.
As we always do with our TBM methodology, we asked probing questions beyond the company’s stated goal of improving security protocols to protect and fortify corporate data. Questions like “why invest more dollars to be more secure?” It came to light that Gannett Fleming wanted to be able to meet advanced certification requirements and needed to strengthen its network security to do so. The next probing question went a step further—“why does being certified matter?” And then the answer emerged that could tie Actions to Outcomes—they needed advanced certifications to expand into a new market and grow revenue.
Imagine going to your Board of Directors requesting a bigger budget simply to improve network security versus requesting funds to invest in an initiative that could generate millions—even hundreds of millions—of new revenue for the business. It’s a powerful shift from requesting funds for projects that “keep the lights on” to becoming a partner who understands the company’s strategy and helps the business grow.
We worked with Switala and his team to build a case for requesting a sizable increased investment overall, including in enhanced security. We helped them shift the impetus from a pure security play to an outcome that would enable market expansion and generate new revenue. This strategy ultimately convinced Gannett Fleming’s Board of Directors to increase Switala’s overall budget by more than 30 percent, including an important funding component for the security initiative.
“We are certain that the strategy you brought to us that leveraged core TBM principals to communicate IT investment value to our Board of Directors—as well as the feedback you gave to me on my draft presentation—significantly strengthened my pitch,” Switala said. “Presenting our investment portfolio the way we did made the Board of Director’s decision to significantly increase their annual investment in the portfolio above 2018 spending an easy one.”
The Actions to Outcomes process is a seemingly simple concept but with some astonishing results. Keep asking “why” to get to the answers that align with the business strategy. Is that all there is to it? Definitely not. There is an art and decades of experience behind our approach to TBM. It takes skill to move IT leaders forward in their thinking. Our team is extremely adept at suggesting an approach our clients haven’t thought of and we know precisely how to ask the “why” questions that will lead to business outcomes. All while changing the perception of IT’s role in a company and how technology investment in viewed.
Are you ready to do what matters more for your company and achieve value realization? If so, give us a call to see how we can help.