Value From Your IT Investment

It’s our take on the Return on IT Investment – A peek into our accumulated experience and research. 

Did you know P&C Insurers’ typical spend on IT budget is 4-6% of their direct written premium? That said, most of them still struggle in establishing the right metrics in determining the Value from IT

Here’s a question for you,

How often do you wonder about the Value you get from your IT investment, exactly when and how are you going to measure it?

In our experience, we have seen Companies facing challenges with ROI, on account of

• Triggers for Business Case, not always being beneficiary or purpose driven – more impulsive than conscious.
• Value measurement parameters – either loosely defined or more focused on getting approvals.
• Limited enthusiasm in training the team and putting the application to use – resistance to change.
• Even with right business case, right value parameters and use, there’s a limited conscious effort for measurement – focus shifts more towards issues rather than making the best use of investment.

A quick example, one of the Companies that we have been working with has implemented an E2E Enterprise Platform, by spending millions of Dollars. However, only two departments have used all the features of the Platform and all others continued with the “old ways of doing business” – using excel/access etc. The primary reasons for this being – reluctance to change, no insistence/incentives from management, for change!

Where does this lead to? Compromised ROI…?

How can we ensure and maximize the return on investment? Is there a method?

Introducing, our Context based ROI Framework! (Refer Fig 1)  A framework for Tech Value Determination across the entire value chain – not just at the start. With the following guiding principles

• Principle 1: Right purpose, Decision for Right Technology and most importantly & buy-in from the beneficiaries makes it the right foundation for value return – setting the context right is half battle won.
• Principle 2: Ensuring maximum use of the Platform by the users – maximizes the returns.
• Principle 3: Continuing with usage and monitoring changes for evolving business needs with right change management protocol and an open platform for communication, assessing its suitability for the current and future and determining the way forward – Puts one right on Top with the returns!

With Companies looking for IT to play a role beyond enabler, as a differentiator/disruptor, around empowerment, satisfaction, ease of use, continuous availability and self-sufficiency – the need for value measurement is more pronounced now, than ever before.

The only guaranteed way to measure the return on IT Right, is to continuously validate its alignment to the business – right from the trigger to closure.

Biz Tech Insights Team Manomay