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Efficiency Vs. Effectiveness: Which Value Metric Matters Most For Tech Spending?

December 14, 2021


Tech executives have historically focused their business cases for tech spending on potential gains in process efficiency and employee productivity. In a half-dozen industries, such a focus can still work. But in most industries, the likelihood that tech investment will lead to productivity gains is very poor. Instead, tech executives in these low-productivity industries should focus their tech investments on improving the effectiveness of their business decision-making regarding customers, operations, and balance sheets.

Key takeaways:

  • Tech spending’s impact on productivity is poor. While US labor productivity has recently improved, growth over the past decade has been weak, despite generally good growth in tech investment.
  • Still, half a dozen US industries have had good productivity growth, and in three of them, tech spending has been a key contributor.
  • But in most US industries, productivity growth has been weak or negative, often despite strong tech spending growth.
  • Forrester has developed a four-factor model for predicting whether or not tech spending is likely to improve industry productivity and applied that to 22 US industries.
  • This webinar presents these industry outlooks on tech spending and productivity and provides recommendations as to where tech executives should emphasize efficiency gains or stress effectiveness improvements.

Target audience level: intermediate

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