In search of ROI measurements
Computerworld -
Thanks to the recession and the resulting push to contain costs, ROI has become a big buzzword in IT. Yet few companies are tracking ROI in a consistent and standard manner, says Kazim Isfahani, an analyst at The Robert Frances Group in Westport, Conn.
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Two companies that have embraced standard ROI measurements - Merrill Lynch & Co. and Compaq Computer Corp. - began implementing their own standard IT planning processes more than two years ago. In both cases, managers had a hard time setting up the methodology, because the IT process was time-consuming and highly political. But the result for both organizations has already been worthwhile in terms of financial payoffs and in raising the strategic value of IT within the companies, managers report.
About 23% of U.S. companies require a detailed ROI analysis to justify investments in all IT projects, according to a December 2001 survey of 1,200 businesses conducted by Marcoccio Consulting in Westboro, Mass. That's up from just 9% in March 2001, an increase that leads consultant Lou Marcoccio to predict that by the end of this year, 65% of companies will require a detailed ROI analysis to justify IT projects because of pressure from top management, executive boards and shareholders.
"ROI is going to be much bigger going forward. . . . It has to be much more than a fire drill to make a difference," says Marcoccio, author of a book on best practices for ROI measures that will be released this summer.
"Most organizations don't have expertise in the whole concept of ROI, partly because in the past, IT leaders
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