Does ROI really bring ROI?

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Really Obvious Inc.

*Management by algorithm is the least effective way to run a company*. I would swap effective for efficient ? provided that the people in post know what they are doing.

*As an IT executive, you have to manage the ROI hot-button metric as simply one of the many deliverable end products by which IT adds value to the company. However, don't confuse satisfying the board and investors with measuring the effectiveness of your IT organization.* I agree with the point made in the first sentence, but not in the second. Satisfying the board should be the same as measuring the effectiveness of IT. This comment is based on the idea that a board is only ever interested in quantitative information, whilst this is often the case it is the job of any CIO and CEO to demonstrate why this should change. I am not daft enough to think that this approach can be extended out from the board to investors, but investors care about the overall performance of an organisation ? if IT is performing effectively this performance will be reflected in the bottom line.

*ROI is the sacred ritual that many managers need to undertake to justify moving projects forward. Do standard ROI measures really capture the true value of an IT project? Or is there a better way?* In my experience, no one ROI approach captures the true value of an IT project. A business case should be compiled to an agreed and consistent format; set out TCO; and incorporate the right ROI model. Context should also be provided in the plan of how a project fits into the organisation?s wider strategy, whether there are political and legal requirements etc.

Posted by: Fandorin   Posted on: 02/23/06 You are currently: a Guest | Members login | Terms of Use

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