Subscribe / Unsubscribe Enewsletters | Login | Register

Pencil Banner

The best tech investment I never made: Four CIOs' tales

Minda Zetlin | Aug. 14, 2012
IT leaders must learn to tell whether a new technology will transform their businesses -- or just become the next boondoggle. Four CIOs offer their perspectives.

Technology hype vs. reality: How to tell the difference

There's one thing everyone working in enterprise IT agrees about: Technology for its own sake is bad. Every new product you adopt has to bring a business value to your organization, either by reducing costs or otherwise improving the bottom line.

Sounds great, in principle. In practice, every technology vendor has a detailed explanation of how each of its products will help your company. It's up to you to figure out which ones really will. Here are five questions that can help, courtesy of Rebecca Wettemann, vice president at Nucleus Research, which specializes in measuring the ROI of technology projects:

1. Can I find a role model? "Look at other companies that are like yours and have implemented this technology," Wettemann advises. "Take the best data they have on the ROI they received. Use that estimate as a tool for making our own decisions."

2. What are the top three benefits? Some vendors claim that their products will benefit your business in 10 or 15 ways. While that may be true, "most ROI from new technology comes from only two or three benefits," Wettemann says. "So only look at the top three benefits, and try to quantify them in a meaningful way."

3. How many steps to ROI? If virtualization software lets you skip buying a new server, calculating the ROI is pretty straightforward. But when ROI doesn't come from direct savings or specific efficiency gains, it's harder to pin down. "An increase in brand value might increase the likelihood that new or existing customers will make purchases," Wettemann says. "The more steps I have to go through to get to dollars, the more indirect the value proposition."

4. Am I buying it because of its category? If you know you need a CRM solution, or you've been hearing the term "big data" and wanting to get in on it, you may be considering a product because of the category it falls into, not because of its actual capabilities. "We've seen it over and over again, with knowledge management, Web services, SOA and many other acronyms," Wettemann says. "People need to categorize something and make generalizations about it." Forget the category, she advises, "instead, ask yourself: What is the specific business problem I'm trying to solve, and will this help me do it?"

5. Will it pass the Mom Test? "We call it the 'Mom Test,'" Wettemann says. "To be able to get employees to use a new technology effectively, they have to be able to understand it and what its benefits are. So if you couldn't explain it to your mom and have her make sense of it, you shouldn't be spending money on it."

 

Previous Page  1  2  3  4  5  6  7  Next Page 

Sign up for CIO Asia eNewsletters.