Justification of IT Strategy

This is a reply to Feha in How to Profit comment. I've decide to make it as a new post, since this is a good topic of IT Strategy. Sorry for non IT, some of the terms here you must google it for yourself. Please comment if you disagree or wants to add something, any comment other than SPAM is welcome.

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Yeah, IT does have a tricky part when it comes to justification. But, it is not just FOSS, but also the propetary too. There is no silver bullet to it, as the world also learning. Of course, we are talking about non IT-based company, a company that runs other business than IT that use IT infrastructure. Let's take email infrastructure as an example to understand what I mean.

For instance, it is hard to justify an anti-spam solution for a corporate. One might find the equation is to measure the level of spam with and without it. But, that's naive. It would make the anti-spam solution somewhat is under value. Anti-spam companies then again modify the solution to put these:

  1. Connection wasted on spams. (Bandwith cost)
  2. False-negative/spam that get through.
  3. False-positives/legitimate emails that get caught if it were using other solution.

But, that's also plain naive. How would you justify false-positive if you weren't sure that the email really get bounced? What measure that you would have to take that? What would you sum here is just a raw view of IT, it only covers basic. 

One of the strategy to measure IT performance (mind you that this is a real case) is to charge every departement that use IT. It might sound silly if the IT guy on your own company charge you with some bills over something that trivial. They would bill you on something that you use as a service. With this kind of dealing, IT departement would have some income written in the annual report, not just expense.

Again, that's just a way to say that an IT implementation is working great, but not a rigid way of telling how effective that implementation. For instance, if your company have a great deal with other company, have you ever been charged on emails that you have sent and received? How many percents being part of the deal's expense you would put on emails?

One of the hidden value of good email spam that is often got away from equation is how many hour per year that your employee spent on deleting SPAM. One might find it silly, but since 2001, SPAM became more hostile. These days, it can cost half of your employee time. This, however, would be a good evidence that you may miss some good parameters of how valuable your IT implementation.

In the end, how a company to come up with monetizing an IT strategy is to measure the outcome of using it. Again, these techniques is only a measure of user satisfactory that hold no real value. They would calculate on potential lost and potential gain. Also, they would calculate on how the company performs before and after the IT implementation just like cosmetic adds.

Because of these potential values, many company would fallen into the trap of spending rollercoster budget. You might find that some of the vendor costs is acceptable for you. You might also find it over-priced and half-baked. This part would simply because of business owners' lack of understanding in IT and sometimes it just for making the company looks cool in front of other company. Yeah, kinda like childish ego of using Power Mac in Starbucks and Blackberry.

How would your company calculate ROI on IT implementation?

Comments

  1. for additional information this 'charging' other department who used IT services can be called: activity based costing :)

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