ROI

 
 
By eweek  |  Posted 2003-11-07 Print this article Print
 
 
 
 
 
 
 


Through People"> CIO Insight: Atti, I was fascinated by your comment on culture, essentially the soft issues. I wonder if you could elaborate a little bit about this. Im hearing about credibility problems, Im hearing different approaches to who has leadership here. We also hear a lot about rogue IT projects. Im just wondering what this is a symptom of. Is this a leadership problem? How do we fix this?
Riazi: I wish I knew the answer. Ive struggled with this issue the last 20 years being in IT and being a CIO. I think theres one reason they say the life of a CIO is three years, because the first year is infrastructure, the second year is begging for money to do ERP applications, and the third year is when you actually do it. And by the third year, you have the whole organization ready to shoot you. You learn two things as a CIO [to be] able to separate those who hate you from those who are undecided. (laughter) This is a very complex issue, and I think, and Im hoping through panels like this and the research companies [to] start going to the forbidden zone. We all hate to do [it]. Were all analytical IT, finance people, and I think weve lost focus on the real issues that I have faced in every project I have rolled out, every large project. I was training some of the finance people, I was in the room where they were being trained on a wonderful application, and three of them sat back and said but thats my job. I was showing them how it was going to be automated, and the light bulb went off, thats my job. Well, that was the job of another 50 percent in the room, but the light bulb hadnt gone off yet.
How do you get ROI? You get it through people. I mean, the biggest cost is people, so thats the first way youre going to go. Even if you dont let people go, youre going to make them more efficient, theyre going to have to learn something new and there is the evaluation on that. I think we [have to] start looking at our failures, because our success has been abysmal. Our credibility is really shot. And thats why I said earlier I refuse to go to see my CFO with an ROI case because hes going to laugh at me and is going to kick me out of his office.

CIO Insight: So how do you survive? How does any CIO survive?
Riazi: I dont use ROI. I dont think CIOs should use ROI because the "R" isnt in my department; the "I" is in my department. The "R" is in the business which I have absolutely no control. So why should I use it?

Cameron: I disagree. I think you yourself pointed out an example earlier where the expense sits on both sides, where the user was sitting down and recognizing thats my job, the investment really is from them, too. They have to put time in; they have to change their process. Good technology has not nearly the impact [of] good process change, with or without technology to support it. So the bottom line, what Im hearing you say is, not that ROI fails or that the projects fail or theres maybe a bad odor of IT history, its that we in IT have sat alone and tried to do these things alone, and that really the cultural change is for us to become part of the business so that we relate to the rest of the firm like, lets say, a manufacturing plants general manager does to the rest of the firm.

CIO Insight: Is ROI politics? Is it possible to say that ROI is a technique that business people use to put the onus and responsibility for IT failure on IT people? You come up with an ROI, you prove it to us, and if doesnt make it, its your fault.
Murphy: I cannot imagine [such] a scenario where we would have a project go forward at Royal Caribbean, where I was developing the ROI. It isnt done. The business unit has to be accountable for the return on investment, except [for] a few real core infrastructure-types of initiatives, [and] even then I can flip back and show them how the value is going to go to the business. Now, you know, alignment is a big part, culture is a big part, trust is a big part. I have a personal relationship with every businessperson in this organization, and I am one of the businesspeople. I dont think people view me as that IT guy who doesnt deliver on projects. Im in a partnership with all of these folks trying to drive the business to success. Its a fascinating conversation, and theres a lot of angst out there obviously, but I think a lot of it is in the relationships that you develop within the business and the trust and the process that you put into place.

Barkley: We require a business case on every project over $1 million that comes to my desk. Before it gets to my desk, its signed off by the business CFO. Even after he signs it, Ill call him up and say: [Do] you understand what you signed? Do you understand how youre going to find a savings? Because Im not the guy whos going to look for them, you are. We require that. In our company, the application development is decentralized; that is, we have CIOs in each of the businesses that are matrixed to my boss, the global CIO and also to the business executive, although we control all of the infrastructure centrally. So the businesses have a big stake in the strategy, what were going to do, and the returns as well. Again, ROI is merely one of the indicators.

Fletcher: I was very concerned by a comment that Atti made which was that the return is at the unit, the "I" [in ROI] is with her. That would concern me because I think that that, to me, would be a little bit of a cultural disconnect between the IT organization and the rest of the organization. The most important thing to remember is that the "R" and the "I" are owned by the company. So you need to get over the sort of silo thing, and you need to go, I think, to the models that both Joe and Tom are talking about, where you have a really strong alignment between the business units and IT, whether the IT is decentralized or centralized. But I think there are some pitfalls thinking that the "R" and the "I" are disconnected, because it all ends up in the shareholder value, and the shareholder value is the company as a whole. You can lose sight of that in the silos.

Gardner: I have to say I agree with everything thats been said here. Im not doing it because Im trying to form any consensus; I think everything here is true. I like Attis comment about people problems. I mean some of these soft benefits or soft costs, how do you get at those? There are ways to do that, and we actually borrow techniques from the advertising industry to get at some of these people issues, primary market research where its not a precise number but its a good enough number, and you can start to see what the dynamics are between some of the choices and some of the design alternatives.

Next Page: Measuring the value of IT and claiming management.


 
 
 
 
 
 
 
 
 
 
 

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