dcsimg
 
 
 

ROI and the Strategic CIO

 
 
 
 
 
 
 
 

By Arthur Langer

Perhaps there has been too much importance placed on how the CIO needs to focus on ROI to be strategic.

ROI is what the CEO and CFO want and the board expects, right? Maybe not.

While it's always nice to have ROI, it's not always realistic--especially with complex IT projects that touch so many parts of a business. The fact is that showing how technology streamlines efficiency, improves support, reaches new customers, and provides a better competitive edge for the business is far more compelling to executives and boards than a nice-looking spreadsheet.

Why? Because it provides them with a better understanding of how the technology fits with the business--a business they surely know very well. CIOs must also show that they understand the business--and what better way then to provide a picture of what the business could be like with new IT initiatives.

Some CIOs have been successful in presenting their ideas in the form of a story--what could the company do if the IT investment is made. This is known as "storyboarding." One storyboard that was used in an international company showed the board how the IT investment helped the company win a critical deal in Asia--and geographical area where the company was not doing well against the competition. ROI was never discussed at the meeting--that was done afterwards!

So storyboarding, as an example, allows executives to participate in conversation and embrace how the technology might work, and to what extent it might help the business. That is, allow executives to engage in the idea.

Allow your colleagues to help discover what the ROI needs to be. You might be shocked that every idea may indeed have a different ROI. In other words, sell the idea and participate in the process of how to make it work.

Remember, strategy starts as an idea and precedes the return. Most executives know that successful strategy starts as an idea--then you figure out how to get it done.

Arthur Langer is senior director of the Center for Technology, Innovation and Community Engagement at Columbia University. To read Art's monthly analysis columns in CIO Insight, click here.

 
 
 
 

4 Comments for "ROI and the Strategic CIO"

  • Khaldoun August 26, 2013 5:57 pm

    I'm really glad you wrote about this. The truth is I believe people are not that concerned about sharing their data, but they are still worried on securing it. Facebook really changed the perspective of people (which includes CIOs), and it really came down to a personal perspective on "how to share your life". We are all OK on sharing our things, just not ALL of them. That affects the CIOs too. The CEOs...although they seam to agree, I'm not that sure if their point of view is the same.Also, management of data has became more "standardized". On the other hand, lower costs that arise with Cloud Computing are more appealing. There is always the European (strong) Privacy Laws and Cloud is still not completely clear about it.Give it another 2 years and we will see. (Congrats on your blog)

  • Andy October 29, 2009 6:33 pm

    If you have the choice of two projects with the same ROI and one is more aligned with strategic objectives, then you do that one. I don't like the suggestion that the choice is based on how you present or sell your idea. That may be of benefit if you are bidding on a project, but internally I don't think we need to start creating marketing budgets for the 'sell.' If it's a good project, it should sell itself.

  • Thomas Pisello October 22, 2009 8:47 am

    In Gartner's latest press releases from IT Symposium, one of the key highlights for budget management next year is financial management of IT. According to Peter Sondergaard, senior vice president at Gartner and global head of Research, "IT Must Learn to Build Compelling Business Cases �" 2010 marks the year in which IT needs to demonstrate true line of sight to business objectives for every investment decision. IT leaders can no longer look at IT as a percentage of revenue. CIOs must benchmark IT according to business impact." Part of the business case will be numbers that demonstrate how much is being spent, tangible benefits the business is expected to acheive, and risks that these costs and benefits will be as anticipated. ROI is required. However, having worked on ROI / TCO of IT for the past 20 years at Gartner and at my own IT value focused independent research firms, too often these business cases focus exclusively on financials and miss the bigger picture. As important in the business case is to tie any of the proposed initiatives to strategy and business goals. A proposed project that saves the company money in this climate is a good project. A proposed project that saves money and contributes / achieves one of the companies top goals is a superior project. Crunch the numbers and use ROI to convey quantifiable savings, business benefits, costs and risks - required in these frugal times. Paint a strategic picture of the project and how it will help the organization achieve key mission goals as Arthur Langer implores - vital to approval and success.

  • DaveD October 09, 2009 11:23 am

    Great article.

Leave a Comment