My consultancy is pure IT.  That means that most business investments have been in technology or training.  So a simple way to measure my ROI was whether I could remain in business.  As I have become so interested in pedagogy, learning and cognitive development that it has become my primary revenue stream, that test no longer readily applies.

I remain engaged with the IT profession due to old friendships, interest in the University of Liverpool program and advisory relationships.  The company is not currently profitable, and I don't know if I care to make it so again.  I'm happy enough bartering skills and resources, studying here and acting as CIO for a nascent NGO.  I manage to keep my expenses down these days, although starting at the UofL did require the purchase of a new laptop.  My biggest recurring IT expense is personal Internet access since all of my services are now hosted out of friends' facilities.  When I was visiting clients the bulk of my expenses were actually travel.  But much as today, if I had the budget I approved the project.  Some customers needed financial assistance with some technology investments, but I generally handled that with a partner.

Before going out on my own I had many different experiences with ROI metrics.  When I worked for Credit Suisse my division was mainly seen as a cost center; internal clients had to come up with an allocation for our services.  A small amount of what we did was customer facing but any profit was accrued to whatever division had paid for our work.  When I worked for IBM I started as an outsourced asset from Mount Sinai/NYU Hospitals.  IBM would have seen us as pretty pure profit, and the hospital as pure cost.  Before I was outsourced MSNYU appeared very confused as to how to account for us.  As I was specifically hired for the integration of the two very disparate entities' UNIX systems that confusion was understandable.  NYU seemed to see IT as an asset while Mt. Sinai saw us as a liability.  That is to say, NYU tracked us as an intradivisional profit center, while Mt. Sinai tried to pay by the project.  I don't think they ever agreed on how to account for us.  But projects got approved in a rather standard corporate political fashion, with a mix of experts meeting, middle management taking their needs and recommendations, and the boards hashing out what could be done.  It was fascinating, however, to see how the experts who had built unique systems or expertise were able to make this unwieldy process work efficiently for them; ROI metrics could be utterly irrelevant for some.  I guess it was inevitable that these two cultures would prove incompatible and some of my first work for IBM would be taking them back apart (Perez, 2010).

So I've seen a few approaches to ROI analysis.  But I have almost always been able to approach it as a sale.  In my experience if there is sufficient desire for a project a means will be found to apply metrics so as to at least pay for analyzing its feasibility.

 

Perez, J.Perez, J. (2003) New York City Hospitals Go Their Own IT Ways [Online]. Available from: http://www.infoworld.com/d/developer-world/new-york-city-hospitals-go-their-own-it-ways-414 Accessed: 14 May, 2010)