Why Your CFO Dislikes IT ROI
posted by Anna Mar, November 11, 2011IT is not your CFO's favorite department. The reason — IT ROI is notoriously inaccurate.
Why your CFO cares about ROI
Your CFO needs to understand the ROI for you project because it tells him/her how the firm's finances will be impacted.If your business case promises efficiencies — the CFO needs to know what costs will be cut and when.
If your business case promises new revenue — the CFO needs to know how much, what the margins will be, and when the bills will be paid.
ROI just the way your CFO likes it
For many business investments ROI is completely predictable.Let's say your firm decides to move an office from an expensive part of town to a cheap part of town to cut costs. The costs are predicable — your ROI predictions should be as solid as a rock.
Nobody likes IT ROI
Chances are your CIO doesn't like IT ROI and neither does your CFO. The reason — IT ROI predictions are notoriously inaccurate. In fact, they are probably the most likely thing to throw your CFO's books into disarray.There are several reasons IT ROI predictions are so inaccurate:
IT project delays and cost overruns are common
projected cost savings are often inaccurate (e.g. automation projects often fail to estimate the costs of handling process exceptions)
IT driven revenue streams can be difficult to predict
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