I understand that I need to learn the company's business and objectives to know where and what to measure. Actually, I read a lot of research and articles regarding IT metrics. But what I really need are case studies with real computations so I can easily relate the buzzwords I keep reading about such as TCO (total cost of ownership). Any advice on where I should start so I can be an IT metrics guru?

I agree with the majority of your readers that your advice truly helps. Thank you for being a mentor of many IS professionals. You are definitely appreciated.

Ron

Dear Ron:
Justifying IT expenses is the bane of existence for anyone in a management job in information technology. There are some ways, however, to lessen the pain. If you work on these methods, I think you can become an IT metrics guru, par excellence--at least, you'll be one in the eyes of the people, such as your former CEO, who approve the dollars that are spent.

First of all, look again at your statement "....made it hard for the IS department to justify IT projects." Reflect on this observation. Trying to justify IT projects is the single biggest mistake that any CIO or CIO wannabe can make.

Did you hear me right?

General George S. Patton said that the job of a soldier is not to die for his country, but rather to make the other guy die for his. In a similar, but less macabre, vein, IT project justification is not the job of the IT organization. It is the responsibility of the end-user sponsor. If we are not building a system for people in the user community, then we probably shouldn't be building it at all. Have the people who will benefit from it take on the task of explaining why the system is important for the business. Let me repeat: The best justification for an IT project is the one a powerful user articulates.

The second point to remember is that your former CEO is not alone in wanting to see some hard benefits for his hard-earned dollars spent on IT. Justifying projects on soft benefits is similar to jogging on quicksand. It's dangerous, and it takes a lot of effort to make any headway. Even soft benefits such as increased customer satisfaction are capable of being quantified to some degree. Suppose we've been seeing a 5% (based on sales) turnover of customer accounts. If it costs us $1 million more to replace those accounts than to have retained them, we have a starting point to calculate the value of customer retention, and, by extension, customer satisfaction.

My experience has been that metrics such as total cost of ownership are not all that useful. They certainly can be helpful in deciding among alternatives, but frequently they require a lot of guesswork that can make the final analysis problematic. At worst, they become a means of trying to convince our bosses that the more expensive gadgets that we want to buy will somehow cost less in the long run than the el cheapo models they would ordinarily favor.

Get an executive sponsor who wants the new system. Understand why. Be able to explain in business terms what the IT project brings to the bottom line of the company. After those hurdles are met, then use the clearest metrics in the world to measure your success: Did you do it on time? Did you do it on budget? Did you achieve the anticipated benefits?

The world of ERP has been my entrance into the manufacturing realm. The plant tours that some of the top contributors in our company have given me are highlights in my work experience. They make me recall my first-ever plant tour, on a grade-school trip to a chocolate factory. The huge vats of chocolate, with smells so intense they were sickening, being mixed by huge mechanical stirrers--we saw and smelled and walked in the actual production area. I was so disappointed years later when I returned, and what passed for the factory tour was now a carefully staged marketing production.

Yes, there is a question in all of this, Herb. I want to see my chocolate factory again--the real thing. And I know they use the same ERP package that my wonderful company does. Do you think it would be reasonable to suggest an exchange of ideas and factory tours between my company and chocolate maker's? If so, how best to go about that?

Thanks and regards,
Semi-sweet

Dear Semi-sweet:
It is delightful to hear that you are enjoying your career in IT. The field is exciting as well as challenging (sometimes too much so).

I, too, remember the wonderful tour through that particular chocolate factory (we are both admitting that we are significantly over 21, I hope you realize) and your description makes the memory so vivid and your question is so reasonable that you have a great future in marketing as well as IT. You are indeed correct that the company in question uses SAP, as does your organization, so you have established an immediate common ground. Not only that, but the CIO of said company is a really nice guy who is a true professional. I am sure that he would be delighted to share any war stories about ERP implementations, so you have a second point of common interest.

Alas, while I suspect he might be able to swing a VIP rendition of the existing tour (meaning you won't have to wait in line) not even he will be able to restore the old walk through the plant. You see, the factory floor layout and its technology is now considered to be a strategic asset and is thus no longer available to the public. You'll find an interesting account of the situation in The Emperors of Chocolate: Inside the Secret World of Hershey and Mars by Joel Glenn Brenner. My only complaint about this fascinating book is that it should come with candy bars so that we could satisfy our pangs of hunger while reading it.

Splitting the operating system and application businesses up is the right solution.

Dave G.

Dear Dave:
I received a great deal of mail about this particular column on Microsoft. It ran about 50 to 1 in favor of the view that Microsoft has too much control over the marketplace. Some people have disagreed, but I still hold with the position that when the overwhelming reason for purchasing a product is compatibility rather than quality or functionality, the customer will suffer. In the "Microsoft Solution," I proposed that Microsoft be required to publish application programming interfaces and file formats. Reluctantly, I think it may be necessary to separate the operating system and applications businesses, although I'd rather see a less drastic solution--if it worked.

The basic problem is that Microsoft has lost touch with its customers, corporate and consumer. It appears far more interested in record profits than in fixing what it sells. In a way, this saddens me, because Microsoft could be viewed with esteem as a really great company if it could change its ways.

Doug J.

Dear Doug:
I was talking some time ago to an IT director for a small law firm who still cherishes his WordPerfect 5.1. He says he uses DOS because nothing can beat that old system for speed and reliability. His argument is that the secretarial staff knows the program, the basic work they do has remained the same over the years, and there is no benefit to him or the firm by rocking the boat. He has other machines that use more modern Windows applications such as time accounting and billing, but the bulk of the office work is done on the tried and true old WordPerfect 5.1. I noticed as we talked that he was very relaxed and confident in his choices. I couldn't help but wonder how many other people were using old systems while the rest of us are fretting about whether we should test the latest beta version of this or that.