The ROI of IT
BackBy Brian Summerfield, Web Editor — April 24, 2006
One of the more common criticisms of the IT department is that it’s just a gaggle of geeks who sit around and tinker with technology that has little to no relevance to their business. Whether that’s true or not, the fact is that the utility of IT investments comes down from decisions made by company leaders, and technology pros should not be made a scapegoat for misspent funds.
John Thorp, president of IT consulting company The Thorp Network and author of a book called the “The Information Paradox,” works frequently with business executives on maximizing the value of their technology investments. He will be speaking on this subject in his keynote address at the 2006 North American Computer Audit, Control and Security (CACS) Conference in Orlando, Fla. next month.
“My real focus now, because I’ve seen so much waste and so many missed opportunities in the past, is to try and get the business to understand that the so-called ‘IT value problem’ is a business problem, not an IT problem,” Thorp said. “A lot of businesses still perceive this as an IT problem and for whatever reason are unwilling to step up to their responsibilities. CIOs have an enormous challenge to get the business to engage in this process.”
To get the greatest possible return on investment (ROI) from IT, business leaders have to carefully consider what their objectives are and how technology can help them achieve that, he said. “IT today is not about just implementing technology. It’s about implementing change. That change is enabled by IT. While that change is enabled by IT, most of the work that has to be done to deliver the value has to be done by the business. That means that they have to be very clear about what the expected business outcomes are when the IT investments are being made.”
Convincing business leaders of their crucial role in the technology investment process can be difficult, and it certainly won’t happen overnight. However, IT professionals who have their ear shouldn’t be discouraged by initial resistance, Thorp said. “A friend of mine in England once said, ‘It’s not easy.’ Well, I don’t know about you, but I don’t have a job description that says, ‘only capable of doing easy things.’”
Getting the business leaders of today more involved in technology purchasing decisions presents a different set of challenges than the executives of yesteryear who simply didn’t grasp IT at all. “I think for a previous generation of executives, this was sort of scary because they didn’t understand it and didn’t want to learn at that point,” Thorp explained. “I think with executives now, they sometimes believe—and are told by the vendors—that (technology) is much more simplistic than it really is. If you want a simple solution, that’s what you’ll hear and you’ll push the complexity aside. Yet today, when you’re implementing ERP (enterprise resource planning), customer relationship management, supply-chain management, business intelligence management and whatever else is coming down the pike, it’s incredibly complex. If you deny the complexity, you just make it more complex.
“I think we have today what I call the ‘Star Trek’ school of management,” he added. “When Captain Picard wants something done, he just says ‘Make it so.’ In business, when a senior executive says, ‘Make it so,’ 10 people run out of the room, all with a different idea of what ‘it’ is. And in many cases, the executive doesn’t know exactly what ‘it’ is either. My message is you’ve got to put much more time up front to clearly understand the business outcome you’re trying to achieve. If that’s what you want to achieve, then here’s how technology can help you.”