ROI as a meaningful investment decision making tool for a new corporate business system is finished.
Generally, two states of decision making in technology implementations are either efficiency or effectiveness.
Efficiency is the old way of thinking, with roots in a mechanical, quantitative view of the world. Effectiveness, on the other hand, is intangible, qualitative and value focused. This state, though, is the source of opportunity and transformation.
Businesses and software providers have been very focused for many years on the goal of efficiencies to achieve cost savings. By systemising known manual processes, you get certainty of outcomes and cost/time savings.
This strategy has been serving the IT industry and businesses very well over the years bringing great benefits in business automation.
As most people are aware though, IT projects have a very poor track record of delivering what was expected. I suggest the lack of focus on the vision, roadmap and qualitative outcomes, has a big bearing on this.
Using efficiency as a driver for change is now likely to deliver a negative impact on the business. It is applying an old world thinking to a new world.
The movement occurring at present is from systematic to people based, certainty to recognising unpredictability, quantitative to qualitative, functional to holistic or even left brain to right brain.
ROIs come from a systemised, mechanical, functional, old world viewpoint. It can only realistically provide meaningful impact where the outcomes are known with certainty. This probably applies for maybe 20% of projects (Gartner’s research shows that 80% of processes are unstructured).
It’s not that efficiencies due to technology are ignored. It is just that the goal and outcome is not on the efficiency gain. Rather than saying, ‘by doing this project, I will reduce the time to complete the process by 75%’, the new world is saying, ‘how can I best leverage the time and efficiency gains to bring about transformational outcomes, developing new ways of doing things resulting from the new technology’.
This elevates the outcomes to aims of competitive advantage, decision support and sustainability.
If you are looking at a business case, be brave. Do not justify the project in terms of efficiencies at all. Elevate the focus to improving quality, to providing decision support in an unknown world, and based on a roadmap not an outcome that addresses the perceived immediate pain.
You can’t know the unknowable. What effect would a decision made based on quality have on the course of the business? That is all hindsight.
If all this resonates with you, then great, you are resonating with a change that is happening everywhere. If you are a senior manager, get your staff orientated to this before they start their projects. Otherwise they will automatically go to the detail and miss the opportunities provided by seeing the big picture.