IT ROI - The Broader Strategic View

There's an interesting article in Forbes about figuring out IT ROI.

Why it's interesting is not so much because of what it says as because of what it doesn't.

Now, to be fair, it is geared toward CIOs - and in that way, it's a handy-dandy guide to looking at the various cost factors that come into the IT decision.

On the other hand, because it's geared toward CIOs it misses out on the most important ROI factor questions of them all:

  • Does the new technology fulfill the strategic, market-building and profitability goals of the enterprise?
  • How do you know?  Have the other executive team members seen and bought into the win you're proposing through this technology change/adoption?
  • How long until that return is seen - for everyone?
  • How will you know - in hard measures - that the ROI has been accomplished?
  • How long will it last?  In other words, how long - according to the vendors and your calculations - before you're having to come back for another capital injection?
Technology is a wonderful thing.  It's also expensive.

CIO types are now arguing that with the cloud available - and all the providers making those clouds bigger and brighter with ever more silver linings every day - that technology costs are decreasing.

True - at least for the actual costs of the technology and its implementation.  And that's a good argument. (For the best argument along those lines, take a look at the Google Apps/Microsoft Office wars that have just begun.)

But the cost of technology is - and must be - part of a larger whole.  It can't be seen as separate from anything.  Especially because technology is - and must be - a driver toward strategic success.

(By the way, you entrepreneurial types, if you're building an IT-related product, make sure you calculate and include these arguments as part of your value proposition.  Otherwise, the WIIFM for your potential customers isn't really being addressed.)

So, take a look at the Forbes article, because it's good information and useful.  Then, before you approve any further IT purchases, take those calculations and put them into a broader context.  A strategic context.

That way you'll ensure a win.