By David Yockelson/META Group
Even as IT budgets seem to be expanding a bit and purse strings
seem to be loosening, it's clear that frugality is still an IT
watchword. This means that even as IT spend increases slightly,
there is still a strong emphasis on IT cost cutting even as the
rest of the organization is charged with growth. This would suggest
an emphasis among IT providers on at least three items when they
discuss their products and solutions:
- Return on investment (ROI)
- Total cost of ownership (TCO)
- Relevance and value to business
However, there are two important points that are often being
lost along the way: providers should not simply discuss why their
products or services offer a return on investment; and providers
must add steps to demonstrate a low TCO. Yet both of these must
take competitive offerings into account. With the IT vendor playing
field ever more competitive, and with the boundaries among
different types of vendors becoming more porous, vendors must seize
the moment to explain why their solutions perform better relative
to TCO or ROI than the competition.
So many vendor presentations and announcements contain
statements about ROI that make it sound like technology was
invented yesterday, refusing to acknowledge that there are
competitive offerings or even that there might be other technical
ways to solve the same problem. It is incumbent on the providers to
demonstrate the superiority of their solutions relative to other
vendors or even other methods, since it seems obvious that if there
wasn't a return on the investment, they wouldn't expect to have
much success selling it, would they?
In addition, we are beginning to find some vendors that go
beyond TCO, examining all the facets of ownership (including
implementation, usability, integration, services, training, etc.)
when touting their wares. These scenarios, though fairly complex,
begin to hit the third bullet point - how will the acceptance and
use of the solution impact the company as a whole? Given the black
eyes that IT has received over the last four years (Y2K, dot bomb,
etc.), any way to link business value to IT spend is a welcome
addition.