Is investment in IT worth the money?
By Richard Sarson: Head of New Business Finance, Telefónica UK
This year, the world’s expenditure on IT is set to climb to $3.49 trillion. That’s a staggering amount of money, and a staggering amount of IT. It’s almost unimaginable. But Gartner, who forecast that $3.49 trillion figure, also believe that “the need to invest in IT to support digital business is more urgent than ever”. Without investment, organisations “face irrelevance in a digital world”, which means how and where that money is spent is critical.
This tends to be where I come in. In my role, I often review the business cases for IT investment. Although to be honest, and allowing for only a little generalisation and some simplification, what I get often feels more like a tick list than a business case. A sort of ‘paint by numbers’ approach. Here’s what I have become accustomed to seeing –
- What the technology is, normally a real ‘nuts and bolts’ description.
- The objectives that the solution will address. The issues it will resolve, or the opportunities it will realise.
- The capital costs over a three or five year cycle. Sometimes this includes an allowance for upgrades. But not always future obsolescence.
- The operational costs involved for deployment, operations, maintenance, support and training.
- How it’s to be implemented, who’s impacted, and how risk is mitigated.
- A rundown of the alternatives and why the chosen solution won out.
- The cost of the procurement exercise.
- Some sort of SMART model, covering the organisational benefits under the criteria of specific, measurable, achievable, realistic and timely.
This looks thorough, and it is. For me, though, there is a glaring omission. Where is the assessment of how people are working today and how will that change with the successful roll out of the proposed technology?
In every business case that I have reviewed during my time in finance, far more can be done to put people first and show how the solution will bring more to the organisation. Many have detailed the anticipated impact on bottom line profitability, but don’t detail this from the perspective of increased productivity, improved efficiency, or greater business agility. How does the proposed solution change and improve ways of working? Does it enable you to re-purpose people into new roles or cut back on resource? Without this, it’s too easy for others reviewing the business case to question “Can we do without this?”. Or worse: “Is this investment a waste of money?”.
With decision-making more critical than ever, as we all try to do ‘more with less’, CIOs have to start defining the business value of IT and my belief is this has to be done from the perspective of people first. I’m the first to accept that this isn’t easy. As an example, I often speak to customers rolling out UC solutions. It’s easy to quantify the savings made through the replacement of out-of-date PBX equipment, but far harder to quantify the value realised by better collaboration between employees or increased productivity as employees reach out to one another more effectively.
Every CIO has to demonstrate the success of his or her IT strategy, and it’s not easy. But choosing key performance indicators that demonstrate people’s engagement with technology, and keeping these at the heart of that, will ensure IT investment isn’t wasted. To find out what we offer to help you put your people first, visit our website.
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