A Damaging Metric

A Damaging Metric
Posted: DEC 31, 2005 07:28:55 PM - CIO Magazine

I can generously use most of all your arguments-all are in alignment when using IT not as a cost center but as a value to business. Who rallies behind the implementation must be a partner and driving force for change.

Metrics-integration with business goals is of course the way we want to go but for most smaller entities; this is new. They go the route of needing the XYZ because...

Metrics can be made to show good TCO, ROI, & ROA. But is it really the way to nirvana? ROA is better than ROI in some circles. All these formulas do not show business value-not really.

I can show you that wireless in a manufacturing plant such as Boeing, can bring you an impressive ROI, sometimes to the value of 135% but at what business cost?

You lose your base, your workers, your plants, lose your reputation in a global market and move-at what costs TO YOU?

So your driving ROI % and pushy Senior Exec’s is not new at all-maybe in a bubble, but we work in a community, international, national, and other borders. These metrics must show goodwill. These are intangibles as such, but tangibles are all you have with metrics. Grab the intangibles-up and done your supply and customer chain.

If your business is simply making money, like a slot machine (not all companies are strategically aligned to making money), then an infrastructure set up for transactional activity is a slam-dunk and IT and business goals win.

But if the goals are efficiency, process management, human resources; Quality expenditures - refining metrics, then it’s more about costs...and IT and costs just don’t get along. IT must deliver lower costs all around in all transactions-automatic, manual and especially with customer feelings...so you data mine-and at what costs? What are the deliverables?

Spending more on IT does not necessarily give you the winning-hand. I believe the information you glean from your business goals, including the tiring and endless details, are the most important for IT and the business, before anyone goes after metrics.

Lyle K'ang, MBA/Information Management
BUSINESS CONSULTANT