MEASURING TECHNOLOGY ROI
USING THE RIGHT METRICS TO ASSESS THE
BUSINESS VALUE DERIVED FROM TECHNOLOGY
IS CRITICAL IN DEMONSTRATING THE EFFECTIVE-
NESS OF BUSINESS-TECHNOLOGY INVESTMENTS.
BY FAISAL HOQUE
Senior executives increasingly demand an understanding of
how business technology can improve operations, enhance
managers’ decision-making and place the organization in a
strong position to compete.
For many companies, the link between business-technology investment and business performance remains
elusive. However, information-oriented companies know how
to break out of the cycle of spending more on technology and
getting less. These companies leverage information across their
business processes—and with customers and suppliers—to
gain knowledge for developing products, spotting emergent
customer needs, forming strategy and analyzing risk.
To ensure that good information delivery results in good
business outcomes, companies must push to instill in their
employees the behaviors and values that affect how the company best uses information for customer, supplier and partner
relationships. When that is done, an information-oriented culture flourishes, and the business-technology payoff is achieved.
The following steps can help create a foundation to provide evidence of a positive relationship between business-technology investment and company performance:
ESTABLISH the business purpose of each investment in
technology: Is it to enable growth, maintain the infrastructure or manage risk?
DETERMINE whether the metrics you use have changed
along with changes in business processes and technology.
AGREE on new metrics that show how your organization
creates agility, sense-and-respond capabilities, and digital
options. This agreement will ultimately lead to metrics that
accurately measure business value.
UNDERSTAND the business environment and how the company adjusts its strategy to changes in the environment. This
often requires real-time adjustments in operations, placing a
greater onus on business-technology executives to develop
a well-oiled system for gathering information and presenting
LEVERAGE management capabilities, such as BTM’s Approval
and Prioritization capabilities and its Consolidation and
Standardization capabilities. These can be used to manage
and define the information requirements to support a high
TRANSLATE the business strategy into tactical plans for
which information and communication technologies can be
deployed. It is increasingly the role of the technology executives to make this connection. Executives must take the lead
in communicating the areas in which business technology
can add value. Employees must be made aware of how these
opportunities relate to their jobs.
IDENTIFY the complementary investments necessary to get
full value from technology investments.
INSTILL in employees the behaviors and values that will lead
to the best use of information to support and enhance customer, supplier and partner relationships.
Faisal Hoque is chairman and CEO of BTM Corporation ( www.btmcor-
poration.com). BTM innovates business models and enhances financial
performance by converging business and technology with its products
and intellectual property.
© 2008 BTM Corporation | firstname.lastname@example.org