The idea behind it
Run, grow and transform is a way of sorting IT spending by business purpose rather than by cost type or department. Run keeps today's services running at today's service levels. Grow improves or extends what the business already does. Transform creates something the business does not do today, such as a new product, channel or business model. The categories come from Gartner's research on IT spending, which is the usual source cited for the model.
The split is only useful if every line is classified the same way each year. Most disagreements come from a handful of cases: mandatory security or compliance work, projects that have gone live, staff who both run systems and deliver projects, and new technology applied to an old process. The worksheet settles them with five tie-breaker questions asked in order, and it compares the organization with its own prior year rather than with outside benchmarks. A falling run share can mean savings, or only that a large project has not yet gone live and added its running cost.
What's inside
- Definitions of run, grow and transform, with examples of each.
- Five tie-breaker questions, asked in order, and four rules for hard cases such as projects that go live and shared staff costs.
- A budget-line tab: last year's actual, this year's budget, the class for each year, the deciding question and a rationale.
- Totals, shares and the change from last year by class, and this year's budget by area and class.
- A page to present the split: shares, a chart, sentences that update with the numbers and the largest grow and transform lines.
- A worked example with 17 fictional budget lines for a logistics company.
Format: PDF (4 pages) and Excel workbook.
A look inside
Pages 1 and 2 of 4 of the PDF. Select an image to enlarge it.
Who uses it
- CIOs, to show the board and the CFO how much of the budget keeps the lights on and how much changes the business.
- IT finance and TBM leads, to classify budget lines consistently and track the split year over year.
- CFOs and finance business partners, to test whether new spending is growth or the running cost of past projects.
When to use it
- The annual budget goes to the executive team or the board.
- The business asks why so little of the IT budget goes to new initiatives.
- A cost-reduction target has to be met without cutting the projects the strategy depends on.
- Large projects are about to go live and their running costs will join next year's run budget.
How to use it
Classify every budget line with the same tie-breakers each year, then take the Present tab or the PDF's last page to the budget review.
- Export the budget at the level budget owners recognize: one line per contract, project or cost center.
- Enter each line with last year's actual and this year's budget.
- Classify each line with the definitions and tie-breaker questions, and record the question that decided it and a one-line rationale.
- Enter a prior-year class only where it differs, such as a project that went live; split lines that mix purposes.
- Check the Summary for unclassified lines, then read the shares and the change from last year.
- Present the split from the Present tab or the PDF's last page, with the largest grow and transform lines.
You leave with: Every budget line classified as run, grow or transform with a recorded reason, the split and its change from last year, and a page to present it.
Where it goes wrong
- Classifying by technology instead of purpose. An AI project that speeds up an existing process is grow, not transform.
- Leaving the running cost of finished projects in grow or transform, which makes the run share look smaller than it is.
- Comparing the split with another organization's. Definitions differ between organizations, so the useful comparison is with your own prior year.
- Changing the definitions between years, so the change in the split reflects the rules and not the budget.
Get the worksheet
It is free. Enter your work email and we send the download link.
Questions
What is the run-grow-transform model?
A way to classify IT spending by purpose: run keeps current services operating, grow improves or extends existing capabilities, and transform creates new ones. The categories are credited to Gartner. This worksheet's definitions and tie-breakers are its own.
Is mandatory security or compliance work run or grow?
Run, under this worksheet's second tie-breaker: work required by law, regulation, contract or an audit finding to keep operating is run, even when the technology is new.
What is a good run, grow and transform split?
The worksheet gives no target percentages. It compares the organization with its own prior year, because definitions differ between organizations and a published average does not account for them.