GAO says agencies must tie ROI to business planning
- By Christopher J. Dorobek
- Oct 12, 1998
Weighing information technology projects against their expected return on investment is
all the rage, but ROI estimates must be tied to agency business practices to be effective,
a General Accounting Office official says.
ROI is a fad; ROI is a theme; ROI is a requirement that is being implemented
right now, said David L. McClure, assistant director for GAOs Office of
Information Management and Policy Issues.
But the concept of getting a return on investments in IT is being pushed alone, he
said, which hinders its overall effectiveness. It is a tool and, to be effective, it
must be weeded into an overall assessment strategy, McClure said.
McClure, speaking at a monthly meeting of the Bethesda, Md., chapter of the Armed
Forces Communications and Electronics Association, said agencies need to implement a
process that focuses on IT systems through implementation and evaluates ROI at every stage
in the process.
If youre doing these well, there is a high likelihood you will
succeed, he said.
If ROI and capital investment planning are going to be successful, they must be linked
to an agencys mission, said Shereen Remez, the General Services
Administrations chief information officer and co-chairwoman of the CIO Councils
Capital Planning and IT Investment Committee.
CIOs are responsible for aligning the agencys overall strategy and its IT
strategy, said Paul Wohlleben, CIO for GSAs Public Buildings Service. CIOs
need to be part of the business change that just happens to focus on technology, he
Wohlleben said his office has imposed what it calls the aint-aint rule.
If it aint in the vision, you aint getting the money, he said.
The return on investment estimate can piggyback on the agencys IT architecture
plans, McClure said. The IT architecture is critical to decision-making, he
Mary Kelly, acting program executive officer for the Armys Standing Army
Management Information Systems Computer Contract, said the service has a well-defined
process for reviewing projects that stresses documented savings. There are two ways to get
approval for a new project, Kelly said: Either identify a threat or make a better business
case than the other projects seeking funding.
It is important to define the baseline costs, she said. You have to identify all
the status quo costs that you can, Kelly said. Thats how youre
going to be judged.
Agencies face several problems in making ROI measurements a useful tool, McClure said.
Some agencies lack adequate data to make decisions that would affect ROI. Investment
decisions have to be made along with process changes, he said.