# How To Communicate the Business Value of IT | Capterra > Struggling to secure more IT budget from business decision-makers? Learn to communicate the business value of your IT spending with this secret formula by Gartner. Source: https://www.capterra.com/resources/communicate-business-value-of-IT --- Small Business BudgetingIT & Software Development # How To Communicate the Business Value of Your IT Investment By Bhavya Aggarwal Bhavya Aggarwal Bhavya Aggarwal is a Technical Content Writer at Capterra, covering Information Technology, Cybersecurity, and Emerging Technologies, with a focus on improvi... [See bio & all articles](https://www.capterra.com/resources/author/bhavya-aggarwal/) Published December 6, 2022 7 min read Table of Contents - [What is run value?](#what-is-run-value) - [What is change value?](#what-is-change-value) - [How to communicate run value](#how-to-communicate-run-value) - [How to communicate change value](#how-to-communicate-change-value) ## Secure more budget for IT investments by communicating business value in a language decision-makers understand. Are you an IT manager at a small or midsize business struggling to justify existing IT spending or secure more budget for future technology investment? Maybe your leadership sees IT spending as a liability, or the actual problem could be how you’re communicating the business value of your IT investment. According to Gartner research, nearly 80% of the IT budget is spent maintaining current business capabilities and only 20% on driving innovation[\[1\]](#sources). However, you might be spending more time justifying innovation (which is only 20% of the investment), and that too in a language that disconnects decision-makers, especially those with nontechnical backgrounds, from the value you're trying to narrate. Gartner says that if you explain your IT investment by splitting it into **run value** and **change value**, your decision-makers will find it easier to understand the overall business value it adds. In this article, we discuss what run and change values are and how you should communicate them to increase your chances of budget approval by 30%[\[1\]](#sources). ## What is run value? Run value is the amount you spend to keep your business running. It includes expenses such as monthly staff payout, hardware maintenance charges, and software license costs. As per Gartner research, run value accounts for **70% to 80%** of a business’s total IT spending[\[1\]](#sources).  Communicating your company’s run value means telling decision-makers how much of your IT department’s resources are being used to maintain current business operations. The focus is on existing business capabilities that are necessary to keep your operations running smoothly. Gartner[\[1\]](#sources) says that the mistake IT managers make when communicating run value is not presenting the outcome and value of their efforts in simple language. They only present their work in technical terms that often disconnect the decision-makers and fail to convince them of the business valuation. ## What is change value? Change value is the amount your business spends to create new technological capabilities or innovate the existing ones. Some examples are adopting a software platform that automatically tests development codes or an automated training process that onboards new hires faster and upskills them for their work profile. As per Gartner research, change value accounts for **20% to 30%** of a business’s total IT spending[\[1\]](#sources). Communicating your company’s change value means telling decision-makers how much of your IT department’s resources are being used to enhance current technological capabilities and make business processes better. The focus is on new technology projects based on how much value they’ll add vs. other current or potential projects. Gartner[\[1\]](#sources) says that the mistake IT managers make when communicating change value is not calculating and presenting the expected returns the new technology will bring. They often present only a broad view, without providing the actual expected numbers, which makes it difficult for decision-makers to understand the full business value of IT investment. ## How to communicate run value Communicating run value can be challenging unless it’s specifically tied to the outcomes that matter to your business. Let’s discuss a few ways to effectively communicate run value to your decision makers. ### 1\. Use language decision-makers understand Business stakeholders might not have the same technical background as you. This could make it challenging for them to relate to all the high-value but technical terms you use to communicate the IT team’s effort to maintain business operations. Hence, always use simple terms that everyone can understand. tips to ace this step - Use plain language over jargons. For example, instead of saying “database management system,” you can simply say “a platform to store, manage, and retrieve business data.” - Break your ideas into simple, digestible steps. Avoid explaining everything all at once.  - Use examples. They can be very helpful in explaining complex technical concepts.  - Use graphs and diagrams. Sometimes, a picture can be worth a thousand words. ### 2\. Share the impact, not the features The value of technology can’t be justified only by the features it brings to the table or the amount it takes to keep it running. You might also want to explain the business impact of having that technology in your stack of IT resources.  For example, the operational cost of a [cybersecurity tool](https://www.capterra.com/cybersecurity-software/) is not simply justified because it protects your business from cyberattacks. You can also justify it by communicating how the tool saves the loss of millions of dollars or prevents the reputational damage a potential data breach can cause to your business. tips to ace this step - Communicate the business impact of IT efforts using metrics such as clients engaged, services delivered, transactions processed, and costs reduced.  - Use [business performance management software](https://www.capterra.com/business-performance-management-software/) to retrieve data related to the performance of technical operations within your business. ### 3\. Use real-world examples and case stories Providing real-world examples is an invaluable approach to show the true worth of something. Following this approach lets you provide concrete evidence of your IT department’s success in improving business operations or resolving IT issues. Use case studies and real-world examples to illustrate the IT department’s value to decision-makers who may not be familiar with the inner workings of your team. You can also use them to benchmark your department’s performance against that of other teams and identify improvement areas. Case studies will support your contention that investing in IT operations can help your business achieve its long-term goals. tips to ace this step - Research relevant business case studies, but ensure they explicitly highlight the efforts of the IT department in ensuring business success. - Use bar graphs, charts, and percentages to present business growth due to IT efforts and help decision-makers get a clear understanding. ## How to communicate change value Change value is usually an easier aspect to communicate because new, innovative ideas that help your organization maintain its competitive advantage are often supported by business stakeholders.  ### 1\. Review the value of your IT resources Set up a system to thoroughly review the value of your IT department’s resources, including hardware, software, and personnel. Reviewing is necessary for several reasons.  **First**, it provides insights into the current state of your company’s technology infrastructure, highlights any potential bottlenecks or areas that need to be addressed before the new tech is implemented, and determines if the existing IT infrastructure is capable of supporting the new tech investment.  **Second**, it helps determine if the existing IT staff has the necessary skills and knowledge to effectively manage and support new technology investments. If not, your business may need to invest in [training](https://www.capterra.com/training-software/) or hiring additional staff with the appropriate expertise. **Third**, it helps identify any unused or underutilized technology that may be suitable for repurposing or retiring. This lets your business save money by avoiding unnecessary investments and redirecting those funds toward more valuable or strategic technology initiatives. Before implementing any new technology, be certain of the value it will bring to your business or how it would help you achieve business goals. Use this formula to calculate returns for a new tech investment: * * * > **Estimated income from technology - Cost of acquiring technology = Result** > **(Result ÷ Cost of acquiring technology) x 100 = Return on investment percentage** * * * tips to ace this step - Compare the cost of maintaining and utilizing existing resources against the potential benefits they provide, and check whether alternative solutions or new tech investments would be more cost-saving. - Engage with key stakeholders, including IT personnel, department managers, and executives, to gather their perspectives on the value of existing resources and get their input on new tech investment for potential improvements. - Use [financial reporting software](https://www.capterra.com/financial-reporting-software/) to get accurate reports on your IT department’s transactions and financial results. This is necessary to justify the importance of new tech investment by presenting the cost efficiency it would bring to your business. ### 2\. Present forecasted benefits against total acquisition cost Identify and clearly define the goals and objectives the new technology is expected to support and how it will help your business achieve those goals. Develop a comprehensive cost analysis for the acquisition and implementation of the new technology, including upfront costs, ongoing maintenance and support costs, and any potential savings or efficiencies it may provide. Let’s take the example of an automation platform that onboards and trains new employees faster. In this case, you can place expected benefits such as the hours and cost saved in training employees against the current expenses of manual onboarding and training.  While documenting the forecasted benefits, include these details to make a compelling case to investors: - The beneficiaries of the new technology - The problem it’s purposed to solve - The outcome in terms of improved performance, increased cash flow, revenue growth, reduced expenditure, or higher customer retention  - The possible risks and the measures you’ll take to prevent them tips to ace this step - Create a detailed forecast of the potential benefits of the new technology, including tangible metrics such as increased productivity, improved customer satisfaction, and cost savings. - Create a presentation that clearly and concisely communicates the cost vs. benefit analysis to decision-makers, highlights the new technology’s potential value, and addresses any potential concerns or questions they may have. - You may also use [business intelligence software](https://www.capterra.com/business-intelligence-software/) to analyze existing data for showcasing the forecasted business outcomes. ### 3\. Calculate the cost to keep the new tech running Calculate the total estimated cost of running and maintaining the new technology—i.e, the operational cost. This is important because a large portion of the budget would be made toward keeping the technology running rather than acquiring or developing it.  Include these details when presenting the operational cost to decision-makers: - The price of the new software or technology, including include installation, setup, license or subscription, and maintenance - The features and the estimated cost to use each feature - Any hidden costs that you may have to consider tips to ace this step - Talk to someone familiar with the new technology or consult an industry expert to get an idea of the ongoing costs of running and maintaining the technology.  - Factor in the cost of employee training and support, including hiring additional IT staff. - If you’re investing in a software platform, read reviews on [Capterra](https://capterra.com/) to check what real users have to say about the product’s operating cost. ## Ready to communicate the business value of IT? Here’s a quick recap of the entire communication process to help you stay focused on the steps you need to take. Check out these Capterra resources to learn more about communicating the value of business resources to stakeholders: - [How To Use Software ROI to Justify Future Technology Purchases](https://www.capterra.com/resources/demonstrate-software-roi/) - [3 Powerful Ways To Get Buy-in for New Software](https://www.capterra.com/resources/ways-to-get-buy-in-for-new-software/) - [How To Identify Key Benchmarks for Your Annual Budget](https://www.capterra.com/resources/key-benchmarks-to-inform-annual-budget/) - [How To Optimize Your Annual Business Budget Planning](https://www.capterra.com/resources/business-budget-planning/) ## Capterra's 2026 Software Buying Trends Report ### Download our 2026 Software Buying Trends Report to see how successful software adopters avoid disappointment and how your business can, too. * * * Sources 1. [Divide the Business Value of IT Conversations](https://www.gartner.com/doc/code/759135?ref=authbody&refval=4013214), Gartner * * * Looking for IT Management software?Check out Capterra's list of the [best IT Management software](https://www.capterra.com/it-management-software/) solutions. ### Was this article helpful? * * * ## About the Author [### Bhavya Aggarwal](https://www.capterra.com/resources/author/bhavya-aggarwal/) Bhavya Aggarwal is a Technical Content Writer at Capterra, covering Information Technology, Cybersecurity, and Emerging Technologies, with a focus on improving IT for small to midsize businesses. He has more than five years of experience in persuasive and fact-based content creation, and his work has been featured in branded publications such as Gartner, Sprinklr, YourStory, etc. Bhavya has a bachelor’s degree in commerce with a strong background in mass communication and digital marketing. 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