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Showing posts from July 7, 2009

To ROI or not to ROI

The current structure and way of managing our companies is basically the same as when the first companies started in the beginning of the 1900’s. Ford and mining companies are really good examples. The focus was on delivering the products as fast and as cheap as possible. People were just a tool to make this possible. A manager was someone who had done that particular job himself before, so he knew all the details. The employees were not supposed to come up with their own ideas, as that was the role of management. And when they encountered a problem, they asked the manager for help. As he knew the details he was able to support them. The most important investment was the investment in machines. Hence, the metric of ROI (return on investment) became a driving factor in decision-making. The measurement of ROI spread into the Corporate environment like a contagious disease. Nothing can and will be done if there is no ROI projection available. Whether it is a project or a new IT system, or