Traditionally, the biggest knock against measuring ROI on IT–business projects has been the nebulous quality of the “R”—the return. However, since project benefits can accrue over multiple years and are either often intangible or not separable from changes to business process or market conditions, many sponsors and IT leaders have found ways to soldier on. Creative workarounds and interesting techniques that take into account the parameters of the “value of IT” debate have enabled them to get on with the projects at hand.
The real reason to actively distrust ROI projections is the other side of the equation: Most IT shops are punting when it comes to capturing the true cost of the investment. The reason is that almost half of the cost of new IT projects is labor and the only way to accurately measure labor costs is through time sheets. According to research by the Corporate Executive Board, fewer than 30% of the largest IT shops in the world have effective time-tracking capabilities.