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't always mean the lowest cost or price. If quality is defined as doing things right, value can be defined as doing the right things. Successful companies continue to develop and refine their own standards for technology, using their own measures for business task productivity.

Quantify the overall economic value to the business when expanding IT capabilities. One car-rental company with 1200 telephone agents calculated it could save $400,000 annually for each second shaved from the average time to book a call-in reservation. Similarly, a credit-card firm justified the investment to add parallel computers to their arsenal because they reduced the run time for a critical application from several days to several minutes, allowing the company to expand its direct-marketing efforts. Another company realized $1 million in annual savings by automating a single computer-operator task, thereby avoiding periodic system outages.

Obvious yes, but few companies have control and flexibility in IT spending. One large company reported annual savings totaling tens of millions of dollars merely by reducing the dozens of PC suppliers down to three. These gains are relatively easy to achieve. Since corporate information is a strategic asset, technologists handling it should be accountable to competent business professionals. Anyone can be tempted to buy new toys, so corporate IT spending should be closely monitored by those possessing enough business savvy to keep technologists on track.