I am a risk manager for an insurance company. One project I am leading is building what might loosely be described as an enterprise risk data mart. Basically we want to be able to make better forecasts both for the short term and the longer term. To do that we need to be able to see all the moving pieces in one system. As part of the standard op procedure the IT folks who are on my project have to prepare and file ROI and CBA analysis for the project. I’m with the business unit, the business unit has decided that we need this system in order to better understand our risks and make good projections. We have the budget, we have approval. But the f’ing IT guys are required to spend hours of their time preparing B.S. statistics about ROI and CBA to feed up their command stream. What a royal waste of time!

I’m with you, JP. I don’t get it. I don’t understand how to calculate the ROI on an IT system designed to support decisions by the business. Any numbers created by the exercise are just fantasy. As you state, the metric is just broken.

But what IS the right way to allocate finite resources among infinite wants? How does one create proper incentives to efficiently allocate IT dollars?

I like that this is becoming more of an economic problem and less of an IT problem!

-JD

http://therehearsalstudio.blogspot.com/2007/05/return-on-identity.html

All are welcome to visit the above link and share their thoughts (including David, who will find Derrida instead of quantum theory)!

On p xii Carr’s book defines IT as excluding people and information. This definition means that Carr’s argument applies only to boxes, screens and wires, with software marginal. In that case we can all agree that they matter less, can we not?

On p xiv Carr’s book states that only by becoming an infrastructural network can IT ‘deliver its greatest social and economic benefits.’ Since we all agree this is precisely what’s happening, it follows that despite Carr’s title, IT now matters more than ever, but not quite in the old way it used to. Once again, hands up if you dissent.

I believe I first heard the arguments about measurable benefit from IT recited soon after I became a trainee programmer in 1962. I am not convinced that the level of discourse has risen much since. We need a new paradigm and must risk being regarded as airy-fairy theorists to fabricate one. Bearing in mind what JP has posted and the subsequent comments, I believe a vital distinction is between procedural necessities and behavioural necessities. I believe changes in areas of thought that are seemingly remote from IT, such as quantum theory (pace Stephen’s distaste) and literary criticism, have a part to play. I will plough on.

MNB, the route you take is one I’ve been on a few times, seems to lead nowhere (as Kris suggests).

We can isolate many things, even salesmen and products, and say that they by themselves don’t make money. Which is a good thing, because it’s true. Teamwork is essential. Brand plus market access plus platform plus infrastructure plus enablers plus supporters and all that jazz. But this network is hard to shoe-horn into the silo approach.

I’m very tired of hearing about how technology is driving business innovation today and every company needs a skyscraper high stack of SOA infrastructure to get competitive. Why? Because it is always coming from technology company executives. Of course technology is an enabler that allows business plans to be implemented where they could not have been without it.

The transportation system of the US is amazing but we don’t walk around saying it drives business innovation. It’s a valuable piece of infrastructure. Dell and Amazon wouldn’t be here today without it. But let’s not go overboard.

ROI matters but I think it is a bit of a red herring. What business executives need is much closer alignment between what IT can do for them vis a vis their business initiatives. During the same conference you attended there was a presentation given that touched on “business application architectures” but it was from a pure technology perspective.

I could go on as this is a current research topic but wanted to say I think you are really onto something!

So let us consider a modest proposal (in the Swiftest sense of the word): The proper place for IT management is under Site Services! (Before everyone gets indignant about “professional values,” one of my friends from the UK told me that, during the Second World War, the shortage of medical help was so drastic that the military did its own training for emergency medical services; and, unless I am mistaken, the best trainees were the ones who had experience as garage mechanics. So let’s talk about the work, rather than the masks!) Now I have to confess that I have no idea how any large business budgets for Site Services and even less idea of whether the corporate bean counters even ask about the return on those particular expenditures; but I think there may be a useful object lesson there, even if it is not a very dignified one.

To think out of the box, you have to GET out of the box. I have yet to encounter anyone involved with Site Services at the “CxO” level (for the usual values of X: I, K, F, E, etc.). Yet the “value that matters” from IT, whether internally or externally, keeps coming back to rendering or facilitating services; and Site Services tends to be the only part of the budget systematically examined in terms of paying for services rendered.

This is why we should examine that literary metaphor, at least in passing. Leavisite criticism concentrates on the text as product as an object for evaluation. Iser introduced the idea of reading as a relationship between author and reader (which may even extend beyond completing the reading of any particular text). Leave it to a good literary critic to understand a service relationship better than the economists and technicians!