The CEO's role in IT decisions: Re-centralized control of IT spending.

Look both ways, Knowing when to act :

To avoid IT investment disasters, corporations must rethink when and how senior management's talents should be tapped.

By Bill Carico

Measure the business value of IT. Anything not measured is not managed. Senior executives should always be looking for value, and that doesn'talways mean the lowest cost or price. If quality is defined as doing thingsright, value can be defined as doing the right things. Successful companiescontinue to develop and refine their own standards for technology, usingtheir own measures for business task productivity.

Quantify the overall economic value to the business when expandingIT capabilities. One car-rental company with 1200telephone agents calculatedit could save$400,000 annually for each second shaved from theaverage time to book a call-in reservation. Similarly, acredit-card firm justified the investment to add parallel computers to their arsenal because theyreduced the run time for a critical application from several days toseveral minutes, allowing the company to expand its direct-marketing efforts. Anothercompany realized $1 million in annual savings by automating a singlecomputer-operator task,thereby avoiding periodic system outages.

Obvious yes, but few companies have control and flexibility in IT spending. Onelarge company reportedannual savings totaling tens of millions of dollars merely by reducing thedozens of PC suppliers down to three. These gains are relatively easy toachieve.Since corporate information is a strategic asset,technologists handling it should be accountable to competent businessprofessionals. Anyone can be tempted to buy new toys, so corporate ITspending should be closely monitored by those possessing enough businesssavvy to keep technologists on track.