Oh I See! Getting CIOs to view their jobs from a different angle

Dec 14 2010   7:07AM GMT

Return on Investment, or Return on Intelligence?

Arun Gupta Arun Gupta Profile: Arun Gupta

Considering that almost everyone is at some stage of the next year’s budgeting process, ROI has been dominating mindshare. Amongst these were two discussions around return on Business Intelligence and return on Disaster Recovery. Both are fairly nebulous in their manifestation, and difficult to put a fix on the number that can satisfy the CXOs — especially the CFO and the CEO.

Business Intelligence is a discipline that suffers from detachment from its real users and owners, largely due to the technology’s complexity. Thinking beyond conventional reports to analytics is a leap of faith, and the enterprise’s ability to formulate and use trends and associations that are atypical. In the flurry of operational activity, discretionary time is a luxury that many can ill-afford. Thus, most organizations end up with expensive automated reports which serve the same purpose that ERP reports did earlier.

Disaster is something that strikes others; so why put aside significant investments, time and effort that could be used to create new capacity or build additional capability? With a few exceptions, almost everyone has a disaster recovery plan on paper — nominally funded, rarely tested end-to-end, and seen as an item necessary to pacify the statutory auditors. Should an untoward incident strike, the ability to retain continuity of business would not withstand the rigor of time and process.

In both cases, continued budgetary support is seen as cost and not as an investment. The discussion on ROI is thus fraught with danger — avoided by the CIO, challenged by the CFO and others. Is there a way out of this predicament? Definitely yes, but it requires the CIO to approach the discussion a bit differently — maybe play a difficult hand; conventional dialogue will not change the outcome.

One track that some have used is to debate the absence of these solutions — what it implies and the associated risks. Absence of BI may probably not be treated with the respect it should, as transactional reports are also possible from the ERP systems and the belief that everything else can be done in a spreadsheet. So a BI discussion has to be guided towards the benefit to different stakeholders and possibly transferring ownership to one of the business CXOs. IT should not be the driving force and implicit owner. After all, the starting point of BI is B-business.

The absence argument has better traction with DR; with the primary systems being out for a period of time, the impact with varying degrees will be felt by everyone, irrespective of industry segment. The time to recovery will decide the type of DR option to be executed. DR is also synonymous with insurance. No one wants to die, but almost everyone buys insurance. So if the data center were to pop it, DR does step in and take over (hopefully, and that is where the discussion went awry).

Are there any models that can be universally applied to formulate ROI on BI and DR? Unfortunately, even those that exist (perpetrated by vendors or consultants) are being challenged to shorten the payback period. Innovation is pronounced after success is evident — else the debate will get ugly. We all know that “insurance promising ROI” is not insurance, we are paying more than we should.

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