Does risk trump ROI when making enterprise IT investments?

// October 20th, 2010 // Document Management, Enterprise content management //

I’m attending the Gartner ITxpo/Symposium this week.

Each year, conference sessions feature a healthy mix of hot button issues purportedly keeping CIOs and IT managers up at night. This is my seventh year attending Symposium.

In the past, the angst projected by session topics felt somewhat manufactured, in my opinion. This year is different.

The angst appears genuine. And, it’s very concentrated on a few key issues, issues that are undoubtedly driven by the fallout of a lingering and far-reaching recession.

It’s evident from the sessions that CEOs and CFOs are casting a harsh spotlight on IT. CEOs are looking for IT to help them innovate and achieve organizational goals in the face of regulatory and market forces that are increasingly complex, dynamic and systemic. In light of the CEOs demands, CFOs are putting the CIOs’ feet to the fire with respect to: 

  • Holding them accountable for the risks associated with their IT investment choices. In other words, IT faces more pressure to help organizations meet their business objectives in a timely fashion and within budget – the first time. IT simply won’t get as many turns at bat to make things right.
  • Understanding the lifetime, total-cost-of-ownership of their IT investments. In the case of enterprise software, CFOs are telling IT, “I don’t care if you can afford to buy and install the initial software licenses, can we afford to run system? Will you have any budget left in the tank to expand, change and upgrade the system throughout the seven to ten year lifetime of the application? If you don’t, our ability to innovate and capitalize on new growth opportunities will suffer.”

From what I’m hearing at this forum and elsewhere, here’s the broad message to CIOs:

Assessing vendor and solution risk is becoming as important as the promise of ROI.

Do you agree with this premise in general? Do you think it applies to integrated document management and workflow applications in particular? How so?

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2 Responses to “Does risk trump ROI when making enterprise IT investments?”

  1. Kyle says:
    10/21/2010 at 10:23 am

    Great post. Specific to infrastructure, I’ve noticed that a lot more customers and prospects are thinking and speaking longer term (i.e. getting more detailed with their analysis around long-term costs in the form of support/maintenance, licensing, etc) before green-lighting a purchase. What was commonplace with large infrastructure projects that required significant capital outlay and opex to implement/maintain, is now becoming more prevalent no matter how “big” or “small” the project. IT absolutely does not want to get burned with an unforeseen expense down the road and are pushing a lot harder to ensure what you’re positioning meets their long-term objectives.

  2. Ken Burns says:
    10/22/2010 at 2:09 pm

    Hi Kyle,
    I appreciate the comment.

    In fact, I think I’ve written a whole new blog post to address it.
    http://bit.ly/9wNtJ3

    Cheers,
    Ken

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