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 The future of trust—no more playing catch up Broadcom: 2023 Tech Trends That Transform IT By Eric Chien, Director of Security Response, Symantec Enterprise Division, Broadcom Mar 31, 2023 5 mins Security BrandPost TCS gives Blackhawk Network an edge with Microsoft Cloud In this case study, Blackhawk Network’s Cara Renfroe joins Tata Consultancy Services’ Rakesh Kumar and Microsoft’s Nilendu Pattanaik to explain how TCS transformed the gift card company’s customer engagement and global operati By Tata Consultancy Services Mar 31, 2023 1 min Financial Services Industry Cloud Computing IT Leadership BrandPost How TCS pioneered the ‘borderless workspace’ with Microsoft 365 Microsoft’s modern workplace solution proved a perfect fit for improving productivity and collaboration, while maintaining security of systems and data. By Tata Consultancy Services Mar 31, 2023 1 min Financial Services Industry Microsoft Cloud Computing BrandPost Supply chain decarbonization: The missing link to net zero By improving the quality of global supply chain data, enterprises can better measure their true carbon footprint and make progress toward a net-zero business ecosystem. By Tata Consultancy Services Mar 31, 2023 2 mins Retail Industry Supply Chain Green IT 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