Jonathan Beyman is chief of operations and technology at Lehman Brothers, as well as an executive vice president. In addition, Beyman has served as the firm's CIO since 2000.
Question: Upper management views technology as strictly operational support, rather than as a sustainable competitive advantage. How do you put an ROI analysis on something as slippery as competitive advantage?
The reality is that a certain amount of IT spend is, and should be, viewed as strictly operational support. In these areas, spending on technology - the "I" in the "ROI" - isn't a choice; it is a cost of doing business. This is not to suggest that these functions aren't important, that the technology doesn't have to be done well or that people can't be more productive as a result of using it. But, since your competitors have to do those things also, these deployments aren't going to be differentiators.
Technology spending of this nature has to be evaluated very closely to insure that your costs are as low as possible and driven lower each year. Management will appreciate if, in places where you can't prove "R," you can continually improve the "I."
On the other hand, smart investing in technology can enhance your organization's ability to generate revenue, control costs and risks, and create competitive advantage. The disconnect you speak of is probably some combination of management's recognition that the benefits and advantages of the technology investment will be hard to measure in dollar terms, often long-term in nature and, worst of all, may not materialize. They also may believe it will cost more than initially requested. The overriding concern is that the "I" will be higher than promised and the "R" a lot less.
Since much of this has to do with credibility, I would suggest approaching management in partnership with business people who can champion the benefits of the technology. I would also suggest identifying projects with near-term deliverables, lots of communication regarding milestones, and honest assessments of outcomes. And, finally, I'd suggest educating management about what's going on with technology investment at your competitors - because it's likely that at least some of them are investing to create competitive advantage, and your failure to do so might mean being at a huge disadvantage!