It's a bitter pill, but you might as well swallow it. Some investments in IT are better than others. The sooner you make your peace with that fact (and invest accordingly), the better off you'll be.
Nucleus Research, an IT consulting firm, did some analysis on the question of what IT technology investments sport good return on investment, and which show poor ROI. The results were surprising.
The firm reports that e-learning solutions and e-business integration platforms provided the greatest ROI for companies in 2002, while e-commerce and business-to-business marketplaces, monolithic CRM systems and standalone content management solutions provided the least.
These findings are based on thousands of ROI studies Nucleus has performed on behalf of Global 2000 companies.
Among the ROI leaders, Nucleus found the following trends.
E-business integration platforms. These platforms, which include Microsoft BizTalk Server and BEA WebLogic Integration, allow companies to get more out of their existing IT infrastructures both through internal and B2B integration. Nucleus' studies show that they reduce costs, increase performance and ultimately generate new revenue streams that translate into increased corporate earnings.
As companies take a hard look at technology spending, e-business integration enables them to take advantage of existing systems and applications to deliver greater returns.
E-learning solutions. Research shows that customers implementing these solutions have quickly recognized first-tier benefits, including reduced costs for travel, human resources overhead, regulatory compliance and customer support costs; and eventually received second-tier benefits, such as increased employee performance that directly impacts profitability. Nucleus found most companies could gain significant returns from even modest investments in e-learning technology.
The "ROI laggards" included:
E-commerce and business-to-business marketplaces. Companies that have invested in marketplaces to attract many new partners have found limited returns -- they would have been better off investing in specific integration strategies with key partners, the analysts concluded.
Monolithic CRM. Companies investing in large CRM projects are unlikely to achieve a positive ROI, because consulting and software costs outweigh returns and a long deployment process slows payback. Companies are better off investing in rapidly deployable CRM solutions with a smaller footprint and extending them over time as business objectives dictate.
Standalone content management. The growth of content management functionality in many Web server and portal products, and the higher costs associated with deploying and integrating a standalone content management solution, make standalone content management a bad investment for most organizations. Customers achieving high returns from content management are doing so as part of a broader strategy with tight integration.
To stress the importance of its findings, Nucleus cites a recent poll of IT decision makers from Ernst & Young that showed that while financial justification of IT projects is important, only 40% are actively researching these ROI figures. Most lack the time or expertise to conduct their own ROI analysis. Also, most are skeptical of simplistic and "loaded" ROI calculators sponsored by the vendors themselves or analyst firms that provide ROI frameworks on behalf of the technology vendors.
