Difficulties in calculating ROI in IT projects

Por: Pedro César Tebaldi Gomes em 03.09.2014

Understand the main barriers the IT decision-makers face when calculating the return on investment

Over the last decades, although information technology (IT) has stepped up to occupy a decisive role in the overall performance of companies in different markets, managers still must face great challenges when it comes to measuring the direct contribution of IT projects for the business. To calculate the return on investment (ROI) of a project is, therefore, an excellent way to defend the initiative with the Senior Management of the company, or of closing a deal with a strategic client.

However, when the calculation of this financial metric needs to be done, managers face some obstacles that may hinder the process. We have prepared this post so that you understand a little more about this subject.

 

ROI in IT projects

 
Get to know the major difficulties of calculating ROI on IT projects:

 

Intangible gains

Considering that it is a financial indicator, the ROI requires the use of accurate information so that it can really be used in the decision-making process. Whether being used to reduce costs or to increase revenues, executives need to see, in real life, the results and impacts of the project to the company. However, many IT projects bring intangible benefits to the business. And, although it is difficult to reliably measure it, these benefits can still justify the investment, whether by increased client satisfaction, team productivity, control over data or even the ability to make projections.

Imagine, for example, how difficult it can be to define the number of hours that a person spends to complete a task in an old system and to do the same calculation for the new program. Besides the learning period required when using a new tool, the duration can vary among employees or teams, which makes measuring almost impossible.

 

Complexity

Some designs are so complex that the ROI may fail to include costs associated with hardware, storage, equipment or technical support to current infrastructure. And, while being unable to take into account criteria such as these in the calculation, the ROI can also leave gaps in the decision-making process.

 

Incidents

When any IT system stops working and lets employees unable to perform their jobs, we know that the losses to the organization can be immense. However, if the company replaces the hardware or software of the infrastructure to reduce the chances of this type of occurrence, all the gain brought due to the system availability is also difficult to be measured, demanding the managers maturity and good control of indicators.

Imagine how many hours of work of some strategic professionals could be spared if they did not have to dedicate so much time of their routine identifying and solving problems on systems or on the corporate network?

 

Handling

In some organizations, the ROI calculation can still go through another barrier, which, oddly enough, is the manipulation of data by employees or sectors that are not fully in accordance with a new solution.

If the Project Manager or the Executive Body are not always aware of the information gathered in each sector, they can make decisions based on data that does not completely reflect the reality of what will be analyzed. Every day, finances appear to be the main ruler of business decisions, which requires that the IT professionals have more knowledge about the way the projects of a certain sector or department can generate gains for the business. However, when fitted with suitable solutions to monitor and track systems and networks, the chances that decisions will be based on reliable data are much greater.

 

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