Thursday, August 9, 2018

How Organizational Dynamics Can Impact ROI Results

The scrutiny that decision-makers apply to ROI results typically are confined to the numbers. This is especially true if unquantified business value is not included with the ROI study. What is hidden and seldom considered is the organizational dynamics that exist behind those numbers. Accounting for these dynamics can help in the evaluation of the ROI results. They may hint at an organizational bias either for or against the new technology being proposed.

CIOs should take into consideration several organizational dynamics when evaluating ROI results. At the end of the day a change in technology can have a big impact on the organization – both positively and negatively – so it’s important to get it right. Let’s take a look at some scenarios where organizational bias might negatively influence an ROI study. (Note that each point can be flipped to show the opposite organizational dynamic and lead to overly optimistic results.)

For instance, when the current technology experts are nearing retirement, an unfavorable assessment may actually indicate that these individuals would rather stay with the technology they’re comfortable with. Change would take older experts out of their comfort zone and create more work for them. They could suddenly become novices when new technologies are introduced. On the other hand, new technologies tend to favor younger professionals, who are eager to enhance their skills and career prospects. Younger technologists can be catapulted to a new position of importance. However, they tend not to be high in the pecking order, so their opinions may have less influence.

Managing the support model for older technologies can be easy task for those who have an intimate knowledge of the older technology, especially if it’s fairly stable. Though life may be busy, it can have little stress since resolving issues has become second nature to the support team. Work is predictable and it’s easy enough to show that no one is standing around with nothing to do. By contrast, new technology can require less effort to operate, so many employees may want to avoid a scenario where more is expected from them – or worse, where they may no longer be needed.

When a technology has been used by an organization for an extended period of time, its technology experts can develop very close relationships with their vendors. This can be good when the relationships turn into partnerships that help the organization. But when the relationships become too cozy, vendors may begin to exert undue influence. For example, they may convince organizations to stay with the vendor’s solution even if it’s outdated or lacks advanced capabilities that could help the company achieve its business objectives.

Not all IT organizations fit neatly into the scenarios described above, but they can give CIOs insight into why some employees may resist moving from an existing technology. Of course, there are legitimate reasons for staying with an older technology, and all of them should be fairly evaluated. But CIOs and other decision-makers should also consider the backdrop of organizational dynamics that could unfairly influence the position to stick with the old technology.