Why IT ROI doesn’t matter?

You can’t miss it. It is all around us. The noise, I mean. “Maximize the value of your IT investments” or “Get the biggest bang for your IT buck” or “how to get IT to do more for less” interspersed with “improve IT ROI” or “better IT ROI”.

Reminds me of a joke in which a home is being burglarized and the lady of house admonishes the man of the house to action: “Don’t just stand there; do something”. And the man’s response? He breaks into a song and dance routine.

Well, IT ROI is the IT community’s song and dance in response to the business’ question: is IT delivering value to the enterprise?

Funny or not, the joke is on us. A lot of time and effort is being expended on something that will not generate the desired results. The irony is that in some cases this focus on IT ROI will produce the exact opposite of what we want to achieve.

Don’t get me wrong. There is nothing wrong with the objective. It is the means that I am questioning. The means to better IT value is not to measure and track IT ROI. To the contrary, IT ROI is one of the most flawed measures of IT value.

ROI is a financial metric designed for a specific purpose. Applying it to an internal investment such as IT is counterproductive.

For the sake of brevity, we will focus on only a few reasons.