CFOs Not Completely Happy With IT Investments

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CFO magazine has published a survey asking CFOs about their technology investments.  Over the past year, the percent surveyed are less satisfied with their investments and their ability to quantify the ROI.  While there can be a number of reasons for the dissatisfaction, my experience points to various factors.

  1. Unrealistic expectations: In an effort to get projects approved, forecasts of expected savings or productivity enhancements can be overstated.  It's not that people are outright lying, mind you, it's because many of the assumptions are at the optimistic end of the spectrum.  That's why it's so important to really challenge the assumptions as the project is making its way through the approval process.
  2. Cost overruns: A logical consequence of unrealistic expectations is that many project plans are based on the most optimistic scenarios.  As we all know, real life isn't perfect.  Project plans and the associated staffing models must take into consideration possible contingencies.
  3. Failure to identiy risk: A well thought out project plan will identiy likely risks and develop a mitigation plan to minimize the impact of those risks.  If risk isn't assessed and mitigated, the project is bound to be derailed.
  4. Believing that technology alone will solve problems:  A company is begging for problems if their strategy is to implement technology and wait for the promised benefits.  What typically happens is that there will be a conflict between the technology and the organization's processes.  When that happens it is tempting to modify the software instead of modifying the organization's behavior.  Most of the time what is needed is to change the behavior.  A technology implementation is often an opportune time to review the organization's process and staffing model and make changes that drive inefficiencies out of the process and maximize the impact of the new software.
  5. Embedding change in the organization's culture: Even when companies make an effort to reengineer processes and drive efficiency, they too often fall back into the old way of doing things.  It takes a concerted effort to maintain the momentum and embed the change in the organization.
  6. Executive Support: To a very large extent the success or failure of a project, as measured by the decrease in costs, the increase in productivity, or both, depends on executive support.  People aren't easily fooled and they can tell when someone is or is not serious about change in an organization.  It is the Executive Sponsor's responsibility to get in front of people and persuasively make the case for change. 

It may not be possible to implement new technology and guarantee all of the benefits promised in the business case, but when expectations are realistic, projects are properly planned and staffed, risk is identified and mitigated, change is embedded in the organization and executives visibly support the proposed changes, a project has a much higher chance of producing positive change in an organization.