Value realization: How to align tech investments with business objectives

How do you know when a technology investment is a success? For many companies, it’s just a feeling that things are running smoothly. For others, it’s something more tangible, like a decrease in employee complaints, improved working relationships between teams, more experimentation, or a team accomplishing something they never thought was possible.

These are all good signs, but when you invest thousands or tens of thousands in technology, what you really need to know is whether or not it’s adding measurable value to the business. That’s the question a value realization strategy answers. 

What is value realization?

Value realization is the process of recognizing, measuring, and realizing the quantifiable benefit or value that investments, projects, or initiatives deliver to an organization or stakeholders. In simple terms, value realization is when the promised value that sold you on the investment is realized in your own use cases.

Value realization looks beyond gut feelings and day-to-day metrics to show how investments are impacting business objectives. It’s the key to avoiding change for the sake of change and maximizing the return on investment (ROI) in new technologies and other initiatives. 

Organizations or even teams within an organization can use value realization to measure and communicate the business value of investments, like new technology. For example, customer success teams use value realization to help customers understand the quantifiable benefits a product delivers, thereby increasing customer satisfaction and customer loyalty. 

Your organization can leverage value realization to demonstrate the return on investments or justify future spending. By quantifying the benefits of a project or initiative, businesses can optimize resource allocation and make informed decisions based on data-driven insights. This approach not only enhances transparency and accountability within the organization but also fosters a culture of continuous improvement and innovation. Ultimately, value realization serves as a strategic tool for driving growth and long-term success.

Value realization is the key to keeping investments aligned to objectives

Discussing value realization at the start of an investment helps everyone understand the strategic vision behind the investment, what goals the organization has, and how success will be measured. When this information is documented and shared with everyone, you can ensure everyone is on the same page and moving in the same direction.

Often priorities shift and change as you move from acquisition to adoption. Documenting value realization also makes sure you can assess whether your investment aligns with both your near-term objectives and forward-looking strategy. 

Value realization can be especially helpful during significant organizational shifts, like digital transformation, that involve multiple investments. Focusing on value creation can help you determine which changes are moving the business forward and which investments should be reassessed.

Organizational benefits of value realization

From a company perspective, value realization has many benefits, including helping to increase revenue and profitability in several ways:

• Increase operational efficiency: Identify places that are underperforming so you can optimize operations, creating greater efficiency, increasing productivity, and reducing cost.

• Deprecate technology that isn't providing value: Recognize when technology isn’t meeting your goals or delivering the value you expected.

• Adapt and change faster: Defining desired outcomes lets organizations be more intentional with experimentation and change. It cuts out the noise and refocuses you on initiatives that add measurable value. 

• Identify and solve problems that impact revenue: A value realization strategy encourages you and your teams to think about what’s holding them back, what they could do if you solved a particular challenge, and what would help them better serve your customers. These are the places where solutions can add the most value.

• Build cohesion and encourage collaboration: The value realization process creates a shared understanding of what the goal is and how individuals can contribute to that shared objective. 

• Drive momentum and innovation: Seeing a new tool or initiative start to deliver value shows people what’s possible. It can inspire teams to build on that success, driving ROI even higher. 

How to implement a value realization process

A value realization process involves identifying key opportunities, assessing risks, and leveraging resources efficiently. It also includes tracking progress, evaluating outcomes, and making adjustments as necessary.

By aligning strategies with organizational goals, businesses can ensure the successful implementation of value realization initiatives. Regular communication, stakeholder engagement, and feedback mechanisms play crucial roles in this process. Establishing clear metrics and measurable objectives helps track performance and determine the overall effectiveness of value realization efforts.

On your value realization journey, it’s good to keep the following steps in mind:

• Define purpose: Why did you make this investment? Why now? What goals are you trying to achieve? Identifying the purpose of your purchase sets the right expectations and helps ensure the investment aligns with your business strategy.

• Uncover needs: Communicate with stakeholders prior to implementation (ideally prior to purchase) to understand what their day-to-day needs are and what pain points they want to solve. How will the new technology meet those needs or relieve those pain points to add value?

• Specify business outcomes: Define expected outcomes and goals and how those lead to value creation in a tangible way. For example, if your goal is to increase content velocity by 20%, how will that impact revenue, increase market share, or enable you to pursue other initiatives that add business value?

• Establish milestones: What will the investment enable you to do in six months, eight months, a year, five years? As you map out project plans and timelines, consider the time to value realization. How long will it take to launch an MVP? How soon will you start seeing value creation? When do you expect to break even and what will the ROI be over time?

• Evaluate impact: Did you hit your milestones? Are you seeing the expected results? Can you validate those results with a measurable return on investment? Measuring impact and communicating back to stakeholders gives you the opportunity to scale the investment or to course-correct if you’re not meeting your goals.

Key performance indicators (KPIs) for value realization

A key part of value realization is choosing the right metrics. Key metrics should align with strategic objectives that have measurable value and contribute to the success of your business. 

We can think of KPIs as falling into two categories: leading indicators and lagging indicators. Leading indicators are predictors of future success, metrics like speed to market or an increase in customer engagement. Lagging indicators measure past performance, metrics like an increase in monthly revenue. 

In value realization, we focus on leading indicators. Leading indicators are forward-looking, so you have an opportunity to improve them before they impact revenue. These key metrics should correlate with the business outcomes you want to achieve, so they help indicate if you're on the right path. 

Examples of value realization metrics

Our customers know the importance of value realization, which is why they rely on the Contentful® Composable Content Platform to power their digital experiences. Here are how some of them are making things happen for their businesses by measuring what matters:

Wrapping up

Value realization helps you align investments with strategic goals and track the value they deliver. It’s how you know which investments are delivering business value, what that value is, and how you can optimize your return on investment. 

Check out our customer case studies to see how many more companies use Contentful to maximize the value of their content and deliver impactful experiences at scale.

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