CIO’s are typically measured on cost, not performance which can be detrimental to their career. So for most CIO, it’s hard to act on logics, when fear gets in the way.... considering ROI remains a primarily tool for justification not for measuring value.
On average a CIO have a life span of 2 – 4 years! Did you know that?
We see a tenfold increase in IT investments every year in US firms alone. Given such large investments, one may conclude that IT is one of the single most important and critical technology management issue facing all healthcare organizations.
Why is this? Many organizations are poor learners and few have cultures that accept failure as part of the learning process, hence senior managers becomes dissatisfied with their CIO’s ability to understand and control IT costs, because most CIO does no focus on how to measure the value the firm receives from IT spending and investments.
Less than half of many hospitals calculate their ROI of an IT investment after the project is completed. Hence there is often little confidence in either the measurement or the analysis. CIO’s are typically measured on cost, not performance which can be detrimental to their career. So for most CIO, it’s hard to act on logics, when fear gets in the way……………… considering ROI remains a primarily tool for justification not for measuring value.
The value from every IT investment should come from its role in creating an asset which has value. Such investment typically involves the use of resources to create or acquire an asset, from which a return or benefit is expected. Senior managers should therefore measure the value of what their CIO does with his/her resources by comparing projected returns or benefits (not cost) — however the reality is that senior managers primarily support IT investments which provide the “best” return (money) and not necessarily the best value.
The use of resources (e.g., money) can lead to very different types of investments, creating different types of assets with very different types of return and business value; so finding value from an IT investment is an elusive task!
It’s not the money that creates the value . . . it’s what you do with it!!