The key to aligning technology initiatives with business goals

Why is value important?

Simply put, business organizations that prioritize providing value to their customers succeed; those that do not provide value fail. This is because customers buy based on their perception of value. Therefore, business stakeholders focus on providing the greatest value for the lowest cost. For IT teams, this means that value is the top requirement; every initiative, every project, every release, every strategy, every tool stack, everything we do must provide value.

Defining value

Defining value is extremely subjective; what one stakeholder perceives as valuable might not be as valuable in the eyes of another. Often differences in value definitions occur because each stakeholder approaches value from the perspective of their own domain. For example, QA professionals see value as improving quality and reducing risk. Herein lies the challenge of alignment; it becomes incumbent on IT project teams not only to focus on business value; but more importantly, to show business stakeholders how IT projects -- especially QA and AI initiatives -- support and contribute to business value.

Cost and risk are important factors in the definition of value. In general, the benefit of an initiative must exceed the cost; however, the reduction of risk must be included in the analysis. For example, an initiative might come at a high cost, but might still be valuable if it reduces risk a legal or compliance risk. This is a big consideration in the health and safety critical domains.  

Aligning on value through a shared language

When business stakeholders and IT teams are not aligned on the value of an initiative, the cause is usually a lack of shared perspective on how the initiative in question will provide value toward meeting business objectives. 

For example, an organization undertook a cloud migration that would provide value in more easily integrating their end-to-end systems, thereby increasing speed of processing and delivery to the customers. This involved major regression testing of multiple applications, so the decision was made to automate the regression suites. This was completed quickly but at a relatively high cost. The business stakeholders were not happy. This is because the IT team failed to show how this cost reduced a high level of risk and shortened the timeline of the project. The IT team and the business team did not have a shared language of value.

Rob Lambert suggested that to show value, the initiative must show how it will make money, or save money, stop the organization from losing money, or protect the organization from compliance/legal issues or bad press. By showing value in this way, IT teams can align the value of their initiatives to business goals; they speak a shared language.

Using a shared language to align on value is especially important when discussing initiatives where the risk, and therefore, benefits are not always immediately obvious. Examples include testing and AI.

Testing

Both Rob Lambert and Vitaly Sharovatov concur that testing is an area where showing value can be difficult, as testing’s value tends to be overlooked until there are major failures in production. Rob effectively showed his business stakeholders the value of testing by focusing on the business value of increasing speed to market; he shortened release cycles from 14 months to weekly releases. He did this by implementing value-based decision making into the test process. He focused testing on features that were most important to the customer and implemented risk-based automated testing and DevOps. In these ways, he quantified the business value of testing.

AI

AI is an interesting example. Although it is arguably a major innovation that is well on its way to becoming an important tool in all domains and organizations, it is still in the relatively early stages of universal acceptance. Josh Duke pointed out that although AI can do many things, humans must find the uses for it. This means that the value of AI lies in how humans -- or "heroes" as Duke called them -- apply AI and verify the results.  To create a valuable AI initiative, a hero must find gaps that AI can fill effectively. The increase in efficiency, as well as the reduction in cost and risk is what creates the value; not AI itself. When discussing potential AI initiatives, it is critically important to use the shared language of value, efficiency, cost and risk. 

A framework for the shared language of value

Once we understand value from a shared perspective based on cost, benefit and risk, IT teams and business stakeholders begin to align. Now the question becomes how we specifically determine what initiatives and projects to present and how we prioritize them.  Vitaly Sharovatov has provided a framework that addresses this challenge. This framework is based on stakeholder involvement throughout the process. Sharovatov’s framework is designed specifically to address quality and testing initiatives as it provides an approach to assessing the cost of quality (CoQ); however, it can be applied to all IT initiatives. Here is a summary of the approach:

Understand the fears of the stakeholders

This includes both business and IT stakeholders; each stakeholder has different fears based on their areas of expertise. All stakeholders should be invited to participate.

Define the risks

Start with the fears; what is keeping each stakeholder up at night? These fears elucidate the risks. Codify the fears into risks that affect value from the perspective of the stakeholder.

Quantify risks

Ask the stakeholders to assess the cost if the fear/risk happens. The stakeholders have the most experience related to their particular fear and can most accurately assess the cost if it materializes. Fears become risks once they are quantified. For QA projects, this means quantifying the cost of quality. It can be useful to map the risks to the areas of quality to which they pertain.

Prioritize the risks

Risks should be prioritized based on probably of happening, the magnitude of loss if they happen and cost to fix. This involves analysis of each risk and how it might be addressed.

Cost/benefit analysis

This involves analysis of each risk and how it might be addressed. Make a list of the possible approaches including the scope, time and cost.  Actively involve the stakeholders to choose an approach. Review and assess as the projects progress.

Finally, it is important to remember that assessment and alignment are ongoing processes. Value is based on the intersection of risk reduction cost reduction, yet it is subject to change based on competition and market conditions. Through our shared language, we must continue to work together on an ongoing basis to achieve value in all our initiatives, especially those related to the cost of quality.

Gerie Owen is a QA engineering manager at Roobrik. She is a conference presenter and author on technology and testing topics, and a certified Scrum master.