IT/business alignment

Using PPM software to bring financial accountability into IT

The CIO, as the liaison between business and IT, needs to know exactly what’s going on in IT and then translate it into something the business side understands: dollars and cents. To do that, the project and portfolio management (PPM) discipline — and software — is becoming increasingly important, midmarket included.

At the 2009 HP Software Universe conference this week, I came across an attendee who stressed just that. Introducing himself as a “turnaround CIO” (who turns around failing businesses), this particular gentleman had a lot to say about the IT culture.

“It can be really difficult to get a data center manager, for example, to tell you exactly what he’s doing and when he’s doing it,” he said. “They turn to you like you have three heads — ‘I’m doing my job, what else would I be doing?’” Continued »

Do collaboration tools really increase employee productivity?

Did you know that the cost of not finding information is $3,300 per employee per year, according to IDC research? That’s crazy! IDC’s research credits ineffective searches; poor, inconsistent access tools; re-created content; reformats; and revisions as factors in causing employees to not find the information they need. So if you’re a midsized company with 500 employees, you’re talking $1,650,000 in productivity losses each year. In this economy, who can afford to take such a hit?

Many midmarket IT organizations are looking at collaboration tools like Microsoft’s SharePoint and social technology platforms to help centralize documents, manage people, tasks and time, and ultimately improve employee productivity. But can collaboration tools actually eliminate or lessen the $3,300 per-employee productivity loss companies are experiencing?

Increased productivity is one of the benefits of collaboration tools, because users travel less and spend less time searching for relevant information and expertise, said Rob Koplowitz, principal analyst at Forrester Research. But these benefits are rarely measured in terms of a formal ROI. Business owners really want to know “if I work with IT, will things work better?” he said.

But some midmarket companies are actually seeing measurable ROI from their investment in collaboration tools. One company is Los Angeles-based Equipois Inc., which manufactures a “zero gravity” mechanical arm technology for use in industrial and biomedical applications. Equipois uses Central Desktop for collaboration among three offices across the country for nearly all operational aspects of the business, from R&D to purchasing to customer project management.

“The cost of hardware, software and staffing to replicate this collaboration would be roughly 40 to 60 times our current annual expenditures, giving us an astronomical ROI,” said Eric Golden, Equipios’s CEO. Using these collaboration tools, “we’ve seen $40,000 to $70,000 in one-time cost savings and $65,000 savings in recurring costs.”

How does he know? Central Desktop’s SaaS social technology platform comes with an ROI calculator that computes weekly and annual savings in terms of system administrator hours reduced, estimated dollars spent on servers and number of hours employees saved not needing to rework documents and manage revisions. Based on feedback from customers, “many companies are seeing ROI savings of one to two hours per day, per employee, using our product,” said Isaac Garcia, CEO and co-founder of Central Desktop.

Golden didn’t say what he’s spending on Central Desktop, but the company’s pricing chart indicates you can have up to 100 users on it for, at most, about $25 a month each. That’s about $300 a year — less than 10% of that $3,300 number we cited earlier.

Central Desktop is just one of many collaboration tools out there, and none are a panacea for every productivity challenge. But as midmarket companies continue looking for ways to cut costs and remain productive in this tough economy, chipping away at that $1,650,000 is one way to boost IT’s contribution in today’s business environment.