by CIO Staff

Word to CIOs: Don’t Forget Metrics

Mar 15, 20042 mins
ROI and Metrics

It is encouraging to see a CIO who takes the lead in focusing on projects that will bring value to the organization and improve its bottom line. Close to 70 percent of IT projects fall in the failed or challenged category?the latter meaning the projects were delivered but did not produce the promised value for the customer. Two common reasons projects fail are a poorly defined organizational strategy and the lack of a well-designed process to filter out low-value projects.

Keeping this in view, my suggestion to Deseret Book CIO Niel Nickolaisen is to ensure that mission-critical project classification is tied to specific quantified strategy metrics?for example, to obtain 25 percent additional market share by December 2004 at an investment of no more than $2 million. Without this, the mission-critical definition will revolve around people’s wishful thinking, a definite path to failed and challenged projects. The same goes for the market-differentiating definition.

Another key factor Nickolaisen must include in his simplified decision process is the risk exposure of each proposed project. Often projects get approved without the risk being fully evaluated. For example, if the IT group started four projects designed to gain that 25 percent market share and assumed the project failure rate is 50 percent, its ability to succeed is fairly slim. It would behoove them to plan for a higher percentage gain to be able to meet the desired 25 percent mark. Nickolaisen is taking a step in the right direction to simplify the decision-making process. Now he needs to make sure the process is comprehensive and robust.