Return on Rebellion

Computerworld - In French, "roi" means "king." Yet "return on investment" - that technique designed to allow non-IT people to evaluate the relative worth of IT projects - isn't a noble or particularly effective undertaking, especially as currently practiced.

Business people have always been interested in how IT dollars actually get spent. A former chairman at a major Detroit auto manufacturer was rumored to have said, "If I had all the money we spent on IT back, I could have bought Toyota and Honda." So those cavalier "Let them eat cake" days when IT executives delivered what they wanted, when they wanted, independent of business needs, are behind us.

The pendulum has swung from IT as ruling monarch of how money gets spent to IT as puppet to the whim of an unruly mob of business people, blindly giving out everything that's asked for. Of course, we all know that any resource allocation technique must reflect the needs of the business. Jim Griffin, former director of IT at Geffen Records (part of Interscope Records Inc. in Santa Monica, Calif.) and currently CEO at Cherry Lane Digital LLC, is famous for oversimplifying IT resource allocation to its political base elements. As he puts it, "If your budget is getting cut, it's because you are having lunch with the wrong people."

Today, we find our companies on the cusp of making critical infrastructure investments that will drive the economics of information management and support (or not support) their relationships with suppliers and customers. Painter Jackson Pollock told us, "Each age finds its own technique." Senior management teams must now develop their own techniques to greenlight IT expenditures.

New techniques of financial behavior are desperately needed in the areas of security, data and privacy protection, where IT investment techniques tend to be reactive. Budget requests are denied until an incident occurs. The bottom line, quite literally, is that we are doing it wrong.

General Electric Co. CEO Jack Welch, speaking to financial analysts recently, explained that despite the softening in the economy, the investment community wouldn't see "one ounce of slowdown in technology spending" at GE. Rather, he said, "This is the moment to widen the gap."

One way your company can widen that gap is by looking at not only how much you spend, but also how you make spending decisions. Financial techniques of the past funded technology initiatives by focusing on managing the business rather than creating what the business will become. We invested in technologies that solved today's problems rather than theproblems of tomorrow. The true revolution will occur when we focus on the future instead of the past. roi

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