WHAT IS THE ROI FROM IT INITIATIVES?

High expectations for improving responsiveness and reliability, while decreasing budgets and maintaining rates, are forcing executives and decision makers to scrutinize and more precisely quantify the value and financial return on the projects in their capital improvement programs. As challenging as these tasks are for traditional “construction” improvements, the situation becomes even more daunting when analyzing information technology (IT) projects which have both “hard” and “soft” sides. Can one reliably predict the impact of implementing or not implementing a given IT initiative, especially versus other initiatives competing for limited resources? If so, which are the recommended methods of analyzing the Return on Investment (ROI) for IT projects? An even more fundamental management issue is that, for some time, many have taken it as a given that IT investment is definitely worthwhile and absolutely necessary. But is every IT project? How can one be sure?This paper is intended to help wastewater utility managers and decision makers understand the issues, and ask the right questions when considering prospective IT projects. The advantages and disadvantages of the most commonly employed ROI financial metrics are presented, along with the pros and cons of different approaches.