Automated ROI analysis software set to ship in September will offer
help to IT managers in justifying the cost of technology
investments to senior management within their companies.
ValueIT, a Windows-based tool kit developed by consulting firm
Alinean, is effectively three IT budgeting tools in one. The
software, which will cost roughly $20,000 (£12,792) per seat, is
designed to calculate the return on investment of proposed
projects, determine which ones offer the most financial value and
compare a company's IT spending against a database of information
from about 4,000 US companies.
The tools are designed to assess how IT spending relates to the
overall financial performance of a company, but Alinean chief
executive Tom Pisello said they also include a list of about 150
"intangible benefits" that IT managers can plug into their ROI
calculations, such as customer retention rates.
"The vast majority of CIOs I know are not familiar with the current
calculation techniques that a CFO is going to be looking for in
project justification," said Garrett Grainger, CIO at Dixon
Ticonderoga. "This tool should give [CIOs] opportunities to do
that."
Dixon Ticonderoga, which makes writing instruments and art
supplies, is preparing to install a manufacturing resource planning
application developed by JD Edwards. Grainger said he hopes to use
ValueIT to measure how the software affects employee productivity
and drives other efficiency gains.
"This product is going to see some pretty decent acceptance in the
market, tight budgets notwithstanding," Carey Azzara, an analyst at
Hurwitz Group, said. Other ROI analysis tools on the market now
have mostly been written by IT consultants and are "usually
patchwork and customised to whatever the problem is the client
brings to the consultant," he said.
But Azzara added that Alinean will have to come up with more
flexible pricing for large companies with many potential users. "Do
the multiplication, and it starts getting pretty expensive," he
said, referring to the $20,000-per-user cost.