Never mind ROI – what's your return on information?

London, April 13th 2005: Sarbanes-Oxley and other government regulations across the globe have proved highly motivating for companies who need to improve their information management processes. Information rightly is increasingly considered to be an asset in its own right. But, most business cases continue to focus only on return on investment (ROI) calculations in justifying information management initiatives, particularly ROI based on the avoidance of cost.

But is this approach right? Are companies taking a negative approach and simply sticking a band-aid on inadequate fragmented systems to achieve compliance and missing a positive opportunity for long-term business benefits through the adoption of true decision support systems?

Rather than being focused on the return on investment, FD’s should be asking what the return on information is. IT efficiency is a good starting point but simply reducing costs doesn’t equal good information management. An information delivery system will never achieve long-term ROI until it is used to meet business goals rather than just increase efficiencies and cost savings.

This is the point when a company can go from good to great, as Mike Bonaventura from DecisionPoint software argues: "A new approach is required. Decision support system initiatives have been notoriously difficult to substantiate using quantitative ROI alone and are littered with unproven business cases. FD’s will need to be convinced of the link between an information infrastructure and the achievement of business goals. A good infrastructure provides faster decision-making based on better quality information, putting clear blue water between you and your competitors."

ROI is just one dimension of a broader return business value model, which underpins Information Economics. The question is, in the long-term what is more likely to benefit a business, a short-term, cost based return on investment or a long-term return on information?

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