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

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