InformationWeek

July 19, 1999

Secret CIO:
Gimme Some Value!

Measuring payback on IT is fine--so long as it doesn't keep your company from staying focused on the competition

Secret CIO ou've no doubt noticed how dominant in today's IT lexicon is the idea of achieving value. It's literally impossible to pick up a publication without finding at least one article that obsesses about the indispensability of improving upon something called the value proposition or the imperative of communicating the value of IT expenditures to the company.

Just when I thought it was safe to go back in the water without being eaten by the business-alignment shark, along comes this new big fish in the catch-phrase pond. It has reached the point where the icon of achieving value inhabits as sacred a spot in our particular corner of the universe as the image of dating that special person occupies in the world of the teenager.

Self-reflection is good for the soul and occasionally even for avoiding the repetition of mistakes, but maybe we should stop examining our collective zits so carefully.

Sure, we spend a whole bunch of money. Yes, we have trouble explaining where it all goes. After all, to misquote the late Sen. Everett Dirksen, "A million here, a million there, and soon it adds up to real money." I've preached for years in this column the importance of communicating what we do in terms that people can understand. But it doesn't take much insight to recognize that without computers we wouldn't have the lifestyle that we do and our society (including our businesses) couldn't function in the fashion to which we have become accustomed.

I know--the question really is whether we are maximizing the return we get for what we spend. And that's a valid query. However, we're not necessarily the ones who should be answering it. So I have a suggestion to help define value for those who sign our checks and approve our fancy new computer projects. The only downside I see is that without the articles on value, our magazines are thinner and a whole lot of consultants will have to get a new shtick.

Let's work on the premise that what people pay for are results. It doesn't matter if we achieve the results with a clerk, a better process, or a computer. The results are what count. So here's my message for the bosses who decide how much money we have to spend: Forget about whether or not it's a computer project. Decide what you want to achieve, whether it's a way to better control your inventory or a Web site to open a new business channel. Figure out all your options.

Then decide what makes the most sense for your business. Just don't require your IT people to be the ones to convince you to do something that is in your own best interest.

Now comes the hard part, that terrible thing called infrastructure. How much is that worth? I'll neglect to point out that we no longer cost-justify the telephones on our desks, if you accept the fact that E-mail and the other tools used to move information around the company are a cost of doing business. As to what you spend on infrastructure above the bare-bones minimum, let's view that as the opportunity cost of being able to make changes quickly and economically--such as when you want to respond to what your competitors are doing. What is it worth to you?

Next, take all the time you previously spent doing the value thing and invest it in thinking about how to keep your company from being smashed to bits by entrepreneurs, who are too busy using technology in building their budding empires of the 21st century to worry about justifying all their IT expenditures. Who knows, maybe you'll make some sound business decisions. At the very least, your IT people can concentrate on making everything work--and they may even have enough time left over to feed you some very good ideas.

Herbert W. Lovelace is the CIO at a multibillion-dollar international company. Herb practices his day job under an alias and has changed the names of colleagues to protect the guilty. Send him E-mail at lovelace@home.com. He'll provide real answers--and whimsical comments--to your questions on InformationWeek Online at www.informationweek.com.