Trends Report

Effectiveness Is The New Metric For Tech Value

Use Effectiveness To Show How Your Tech Delivers Business Outcomes

June 23rd, 2021
With contributors:
Matthew Guarini , Audrey Hecht

Summary

For at least 60 years, efficiency improvements have been one of the major sources of business value from technology. Improved efficiency in processes and activities translates into improved productivity and thus lower costs and higher profit margins. But improving efficiency and productivity is not the only — or even the best — way that technology delivers business value. Instead, we think the proper way to value technology is to focus on how it helps achieve better outcomes. If efficiency involves reducing waste in inputs (e.g., costs), effectiveness involves reducing waste in outcomes (e.g., subpar revenues or costly disruptions). In this report, we explain why effectiveness is a critical metric of tech’s business value and how you can successfully measure it.

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