It would be suicide for a CIO to go to the CFO or CEO and say there’s no real return on our technology investments. But according to one industry expert, it’s the truth.
“If you just make a technology investment and don’t change the way you’re doing work, there’s no return on it,” said James Champy, author and chairman of consulting for Perot Systems Corp. during a recent interview at the MIT Sloan CIO Symposium. “The ROI doesn’t come from the investment in pure technology, but from the change in the nature of the work.”
According to Champy, the only way to measure the success of a technology investment is not through ROI, but through the realized improvements in business performance. And in the end if you have a dramatic improvement in business performance, you usually have a significant ROI from your technology investments.
So what’s the best way for measuring business performance and communicating the role technology plays in its success?
Many companies use BI scorecards and dashboards as a formal means for measuring business performance in the enterprise. These types of tools allow companies to use data in a more productive way and better align technology goals with the needs of the business.
As far as communication goes, you should “go to your company executives and tell them ‘here’s a way we’ve used IT to get a product to market, or respond to a customer call the day it comes in, or reduce the cost of a process by 50%,’” advised Champy. These types of “wins” are great examples to show the business executives how work has been significantly improved by technology investments.
And that’s where the real ROI really comes in – in the improvement technology investments make to business performance.