Hygeia’s two-committee process may offer an important benefit by implementing a division of labor similar to that seen in various accounting functions. With this approach it would be difficult for any one person to adjust the numbers until he got the answer he wanted. A conspiracy of two or more individuals from different groups would have to occur to fabricate a particular ROI. It is certainly plausible that this process helps to encourage objectivity.Unfortunately, while Hygeia’s committee solution does address certain estimating biases, it still feeds this information into a traditional ROI calculation, which is misleading no matter how good the estimates were. Most accounting-style ROI calculations ignore some of the most critical factors in IT investments because they appear to be intangible. Risk, information value and flexibility, for example, are often considered unquantifiable when in fact they have totally objective measures with provable economic valuations.Computing the economic impact of risk is, in fact, the domain of Hygeia’s industry. Yet I’ve found insurance companies almost never use methods from actuarial science in IT assessments. I’ve even seen the IT departments at such companies treat risk as an intangible. But if Hygeia asked one of its actuaries to compute a true risk/return analysis of an IT investment, it might be surprised by the results. The actuary would surely find, as I have, that IT investments are relatively risky, and measuring that risk would have a profound effect on IT decisions.To say that the committee solution is better than Hygeia’s previous method, it must be able to show that (1) the resulting decisions are different from what they would have been otherwise and (2) the economic results of these investments are better than they would have been. Yet most organizations with a new decision-making method can’t show this is the case. The perception that a new method is better than an old method is often only a placebo effect in that everyone feels better about it simply because they are doing something about it. Unfortunately, without a proper risk analysis, it is unlikely that the IT decisions are improved by very much. In short, Hygeia has found a good solution to the organizational issues behind generating estimates, but I bet one of its own actuaries could teach the company something about what to do with those estimates. Related content brandpost Sponsored by Freshworks When your AI chatbots mess up AI ‘hallucinations’ present significant business risks, but new types of guardrails can keep them from doing serious damage By Paul Gillin Dec 08, 2023 4 mins Generative AI brandpost Sponsored by Dell New research: How IT leaders drive business benefits by accelerating device refresh strategies Security leaders have particular concerns that older devices are more vulnerable to increasingly sophisticated cyber attacks. By Laura McEwan Dec 08, 2023 3 mins Infrastructure Management case study Toyota transforms IT service desk with gen AI To help promote insourcing and quality control, Toyota Motor North America is leveraging generative AI for HR and IT service desk requests. By Thor Olavsrud Dec 08, 2023 7 mins Employee Experience Generative AI ICT Partners feature CSM certification: Costs, requirements, and all you need to know The Certified ScrumMaster (CSM) certification sets the standard for establishing Scrum theory, developing practical applications and rules, and leading teams and stakeholders through the development process. By Moira Alexander Dec 08, 2023 8 mins Certifications IT Skills Project Management Podcasts Videos Resources Events SUBSCRIBE TO OUR NEWSLETTER From our editors straight to your inbox Get started by entering your email address below. Please enter a valid email address Subscribe