Organisations can lay claim to achieving a 'real' return on IT investments only when they hit both operational savings and soft benefits, according to Ken Larbalestier, a former IT manager for Naval Systems Command at the Department of Defence.
In the 90s, Defence achieved tangible returns after integrating its core business system for payroll and finance, DEFMIS (Defence Finance Management Information System) in a LAN at the client and workstation level, Larbalestier told Computerworld.
Assessing the quantifiable returns on an associated project -- a WAN and LAN implementation -- he said: "With a WAN and LAN installation to support our core infrastructure, we were replacing old work practices. And the return was evident through improved morale, better top-down communication because of e-mail and overall better business practices."
Larbalestier said Defence reduced headcount in its finance unit in Sydney from 200 to 50 people within 12 months of the DEFMIS implementation.
He said this translated into cost savings of more than $3 million in that period.
To use IT for strategic gain in a customer-focused economy, Larbalestier said companies need to take a more holistic view of their IT systems environment.
"Business should assess its potential to embrace the Internet for benefit with consumers, suppliers and employees; organisations are at the bottom of an IT visionary foodchain at the moment," he said.
"The Web has been a quantum paradigm shift in the way we do business," he said, and it has been adopted in the same way the first computer system was adopted.
"Yet companies have to realise the Web is much more than an exercise in PR; it's a way of focusing your business by using it to provide customer access to a company and for people to partner with it."
However, lots of companies, he believes, are "still unwilling" to embrace the "customer of the 21st century", claiming most small to medium organisations in Australia have an incomplete vision of IT as a business strategy.
Larbalestier attributes this problem to what he calls "the current IT professional culture [of] staff being too inexperienced" to develop a business strategy for technology from concept to execution.