e-business IT: To determine ROI, treat it like an employee
04.03.2002

Benchmark's latest annual survey of computers in manufacturing found that growth in serious e-business IT is to remain slow, as users find fast ROI in doubt, and on-going cost and culture barriers.

Many companies are very likely to find it difficult to demonstrate meaningful ROI in relation to e-business IT, because take-up of new channels is hard to predict, as is long-term impact on the business as a whole.

However, there can be no doubt that slow take-up of e-business will weaken the position of UK manufacturing in the world economy, as our overseas counterparts innovate, progress, and steal a march on UK industry.

Demonstrating ROI is a crucial starting point for any major IT acquisition, but with e-business its likely to be years rather than months in the making. For IT solutions providers and purchasers alike, finance is an excellent way to get things moving, evolving the solution as the benefits emerge and the knowledge grows. The monthly payment for acquisition by finance can be equated to a salary, and ROI judged on the same basis as you would an employee: if they perform well and add to your bottom line, they get a salary increase.

Yet a recent research study has polled finance directors of 100 UK companies with turnover above £50m to find out about the penetration of finance as a way of acquiring IT solutions. The survey showed that 68% of the sample is still using cash as their sole means of funding.