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Preparing better business cases

Preparing better business cases

Imagine a world where no one in your country responds to surveys.

Research is vital to keep industries and executives informed about trends and directions, but are senior IT executives aware of this importance, or do they see information gathering calls as a nuisance to be avoided? It is amazing how difficult it is to get local business executives to respond to a research project. Right now I am midway through a project that requires me to undertake a simple survey of business executives. I want to understand how organisations place a book value on their core software assets. Do they treat them as a liability or do they treat the expenditure as an asset and capitalise the expense? My study requires respondents to answer around 20 questions, the vast majority of which require them to rank an option. It is something that takes them five to ten minutes and for this time they will get a free copy of the final survey report.

Everyone is very busy. I appreciate that many sales people say they are doing a research project when they are really gathering information for a sales call. I also acknowledge that many businesses are sensitive about sharing confidential information that might be a competitive advantage. However, if someone is a bona fide researcher, and has a track record of doing this for many years, then surely it is in executives' best interests to try and support such efforts when they can. After all, they can always respond anonymously if they need to.

Research insights valuable

Research provides overall insights as to what is happening in a local market and surely those insights can only help any senior IT executive. I mean it is not as if CIOs think that the task of preparing business cases for IT investments is an easy one. If you look at the results of most surveys which ask IT executives what they see as their major challenges then you will regularly see two issues high up on that list. The first of these is inadequate budgets. The second is the difficulty of proving the value of IT.

How then can these issues be addressed? Now I might be biased but surely some independent local research could go a long way to help. If a CIO believes an IT budget is inadequate, on what is the assumption based? If it can be pinpointed what other businesses of a similar standing spend each year on IT then if their own figure is below that norm a case can be more effectively made that the investment in IT by the business is insufficient. However, without that insight the financial needs of the IT department will be a much more subjective matter.

Proving IT's value

The second issue of proving the value of IT has long been a thorn in the side of the CIO. This challenge was compounded in 2003 by the Nicholas Carr piece in The Harvard Business Review which argued that 'IT doesn't matter'. Mind you, as one IT executive once reminded me, shut down the corporate e-mail for five nanoseconds and then see how many business executives would argue that IT is unimportant. However, in many ways this dialogue typifies the challenge that confronts CIOs. The business cannot live without IT but often sees it as no more than a necessary evil.

Again local research can help the CIO with this challenge. Firstly, it provides comparative data. It shows what other organisations are doing. It identifies technologies where businesses are increasing their investment. Such uptake might warrant the CIO checking out this functionality to ensure their organisation does not get left behind. On the other hand research also helps the CIO to distinguish between the hype that plagues this industry and reality. It better equips the CIO to answer the perennial executive question of "why aren't we doing this".

Survey example

Let's take the example of the current survey I am doing. This seeks to determine if organisations have a true appreciation of the value and importance of their core software assets. Without this insight, it would be easy to agree to discard long established and proven legacy systems in favour of a generic ERP package. However, if that software is seen as an asset that has been capitalised the business will better appreciate the cost of doing that upgrade. If the core software is seen as a liability that has been depreciated to nothing then it will be much more difficult for the CIO to argue that these assets are too important to throw away.

An appreciation of research will help inculcate a culture that recognises the need for metrics in other parts of the IT department. For example, what is best practice in IT service delivery capable of achieving? As in sport, before you can answer that question you need to know what the best are achieving. If not then you might get disillusioned striving for the impossible.

Gathering insights

However, there is another aspect to the matter of research. IT executives must gather insights in to what their executive peers, especially the CEO and the CFO, are thinking. This entails finding out what is revealed by research that has targeted them. In this regard I believe the best place to start is at The Conference Board website (www.conference-board.org). This organisation, for want of a better description, is a global club of CEOs. Each year it conducts a worldwide study looking at what CEOs identify as their major challenges. The research is very reasonably priced (under US$300 for the executive summary) and is carried out every 18 months. By my reckoning any CIO wanting to align their IT department with the business has to address the major CEO challenges identified by The Conference Board. It provides very valuable ammunition that will embellish many a CIO's investment case.

Imagine a world where no one in your country responds to surveys. In such a scenario the only information available would be from different countries with different cultures and different economic circumstances. You know that any arguments you propose using these statistics could easily be shot down. All your executives would have to say is "so what, how does this relate to us" and you would not have an answer. Instead if the data is local it will be much harder to challenge. All it needs for this to be reality is for you to support those calls from local researchers like myself asking for your brief assistance. You will find that a small investment of your time will generate the evidence that might well take the drudgery out of preparing future business cases for IT.

Peter Hind is an independent analyst, researcher, consultant and commentator in the ICT industry, with 25 years experience spent among major ICT users, international IT suppliers, local distributors, IT industry bodies and research organisations. He is the manager for the 2008 CIO Conference in Auckland, New Zealand on September 16 and 17.

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