Challenge, knowledge, future, success, cutting-edge: these are only some of the meanings that the term technology assume to date in the market, but only a few of them associate technology with return on investment (ROI). Basically, ROI means doing more with less, and if we could apply this concept to the technology, we will be able to achieve different and highly successful benefits.
Let`s look at the stage to which we are linked to technology. Today every new computer, desktop or laptop comes equipped with many new buttons and new functionality, many of which we may never use; however, manufacturers convince us that it is better to have these functionality than not to have them at all.
How can such behaviour be justified? How can we evaluate and meet our real needs instead of purchasing sophisticated, cutting-edge technology? Quite obviously, if we could halt the proceed of time, we would have more time to decide what we are really looking for, with the aim to find a balance between what we need and what we really use. To realise a ROI, a specific tool must identify the areas where it should be possible to save time and consequently money.
Actually, achieving ROI is a basic need for all companies. According to Gartner, if accompanied with a cost justification report and a business case, a project stands a better chance (60%) to be approved. Likewise, 80% of companies require a ROI analysis for any new IT initiative. Besides, IDC claims that the sales cycle is reduced by 30 to 40% when anticipated by a ROI analysis. Companies investing one million dollars on new technology take approximately 18 months to make a purchasing decision. Companies that can demonstrate a proven ROI shorten the purchasing decision to six months or less.
According to Gartner and Dataquest, two-thirds of technology providers claim they are asked to perform an analysis of the total cost of ownership (TCO). More than 25% claim that customers frequently or always ask for this analysis. The key value for every company is first to consider which is the target they have to pursue and then to decide what they need to buy, where they need to invest.
Another key point is how to analyse the best technology decisions by performing good evaluations on past purchases. The question is now: is it really possible to get what is stated in the justification plan? Do companies really justify technology investment appropriately and get the expected results? Unfortunately, the results can be viewed and analysed only one year later. What is really valuable is a common theory of ROI. The best way to proceed is to focus on long-term results and to establish a true balance between what has been said and what has been achieved while considering the metrics established prior to undertaking the project. In order to be able to achieve these kind of results, it is important to have a unique view into the business which can be shared from the executive and technical viewpoints.
Typically, the operations manager only considers technology issues when he takes an IT decision. Executive directors do the same when evaluating; they only talk about the expectations in terms of ROI and financial factors; and so, a schism develops between these two areas. One deals with bits and bytes while the other with financial ROI. Both are valuable insights which need to be considered together in order to reach a focused plan for long-term commitment.
This solution should help companies in reaching three key goals: Technical Target: Consolidate the current infrastructure, including the hardware technologies from different vendors; Management Target: Integrate all of the information and the event data into a unique view to have an unified vision of dispersed data; Executive Target: Define a general executive vision including services, executive management, corporate goals and certain other unique attributes of our service, expected ROI, etc. All the benefits which can be established as business guidelines.
A well-defined set of rules helps in driving and relating all the information generated from the middle management. It is similar to a pyramid with levels to be reached, the idea being that the team can start generating results such as savings and other benefits and establish a positive synergy to create added value.
Remember not only to evaluate technology, but also provide a sort of correlation with the business goals.
By Eric Jorgensen, Micromuse Continent Director - Africa
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