In 2024, Forrester estimates that tech spending will reach $4.7 trillion, up 5.3% over 2023 – faster than GDP once again. This reflects the rising importance of information technology in business, governments, education, and society. To deliver the capabilities that their businesses need to thrive and grow while retiring technology debt and reducing costs, technology leaders must change the model. An IT strategy disconnected from business goals jeopardizes the positive impact that IT teams can have on revenue, profit, customer satisfaction, and employee engagement.
To thrive and grow, firms must make a strategic commitment to “high-performance IT,” defined as the pursuit of continuously improving business results through technology.
Forrester’s high-performance IT research recognizes that every organization is unique and that a one-size-fits-all approach to IT doesn’t exist. Instead, technology leaders must tailor their strategies to align with business, ensure high technology trust, and adapt rapidly to meet changing business needs.
With these principles at the core, high-performance IT leaders direct their investment and execution priorities to one of four IT styles (see Figure). These styles offer sets of capabilities – technologies, practices, and skills – that deliver a specific business result.
The Opportunity for the Tech Industry
High-performance IT comes to life when technology leaders assemble the right ecosystems and portfolios of capabilities to deliver what their businesses need to succeed. The technology industry, both tech and service providers, plays a critical role in creating and delivering these capabilities.
To help CIOs deliver high-performance IT, technology and service providers must stop thinking about the next deal and start becoming co-innovation partners. Firms need partners they can trust to collaborate with other ecosystem partners and with all parts of the business to deliver technology capabilities with outcomes for each style. To do this effectively, support the path CIOs are taking to maximize the value from partners [LINK]:
- Reach and serve business stakeholders as well as technology leaders. Shift your offerings and communications towards business impact. For example, technology providers will need to communicate to business and technology leaders precisely how their technology capabilities deliver business outcomes. Service providers will need to create the connections between the tech and the business impact through industry solutions, and business relationships and savvy.
- Link solutions to the primary value delivered by technology. The styles of IT map directly to the technology capabilities needed. For example, securing products is a big part of the Cocreating style. Optimizing cloud operations and costs improves the Enabling style. Ensuring data quality supports the capabilities underpinning the Amplifying style. Transforming happens when firms work with partners to build breakthrough tech-driven businesses.
- Offer commercial models tied directly to output or outcomes. In the race to replace technology debt with impact-generating tech solutions, providers need to tie their compensation more directly to business results. Stop thinking of technology as a cost of doing business and start thinking of it as a business asset to be dialed up and down as business needs change. Consumption or value-based technology pricing and more value-aligned service pricing. GenAI will only accelerate the shift in services away from time and materials and towards fixed and value-based pricing models.
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If you’re a Forrester client and would like to learn more, please set up a time for us to talk. If your company has expertise to share on high-performance IT, feel free to submit a briefing request.
