| Access
the Research presented at InfrastructureStrategies
2002 |
| Realizing
ROI on IT |
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8
Industry Veterans share their Views
Calculating
ROI (Return on Investment) on IT is no longer optional;
it is rapidly becoming a requirement prior to any capital
investment in IT. In the recent Network Magazine-ORG-MARG
survey (Infrastructure Strategies 2002), 34 percent
of the IT Heads said they consider ROI as an important
decision-making parameter for an IT investment.
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Banking
on an ROI model
Measurement
of technology ROI in an organization depends on the type
of investment one has made and should be looked at on
a case-to-case basis. There are some complex financial
models that allows you to calculate the ROI. |
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Putting
structure to processes
Calculating ROI is an inevitable function in today's
low-growth business environment. There isn't any structured
tool to calculate ROI. A cautious approach before deploying
a project and awareness of common mistakes will put
some structure in the ROI process.
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A
mixed bag of returns
Although
the process of calculating ROI on technology investment
is important, it depends on a mixed bag of situations
and conditions.
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ROI:
Reality or illusion?
An
ROI exercise is useful but the figures achieved are
tentative. The returns may be judged in terms of quantity
and quality.
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A
take-off on ROI
IT
has crossed the line of being an enabling tool and has
interwoven with business processes to become a part
of an airline's life. In such a situation, it's a difficult
challenge to measure ROI on IT expenditure.
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The
elusive ROI
There
are myriad of mathematical models like NPV and IRR to
calculate returns but they may not give you a true picture
of ROI. In cases like ERP, SCM, and CRM projects ROI
is an elusive element.
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Steering
ROI in the right direction
In
the current state of economy every investment has to
pass through a financial 'gate' which allows only justifiable
investments to pass unhindered. A smart IT Head will
think ahead and figure out means to justify the essential
IT projects that are necessary for the organization.
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ROI
on IT-Not much quantity
Although
it's natural for the higher management to ask for ROI
on IT investments, it is difficult to set a quantitative
value to it. On the other hand, the qualitative benefits
that are difficult to put on paper, are very high. |
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