Are you a slave to the numbers?

Did you ever attempt to measure the ROI of your new oven?

Chances are the answer is no. That’s because when your old oven quit working, or got too old, or just started bothering you for some reason, you knew it was time to buy a new one. If pressed, you probably could have made a business case for the purchase, but really, you knew it made no sense, so why bother?

Recently a finance chief for a Toronto company told me that he took a similar approach when he went shopping for a customer relationship software package. He didn’t want to, nor did he have to, move mountains to convince management of the wisdom of the CRM strategy. The notion that customer service could be improved, and that sales staff would have access to much more current and organized data didn’t require a hard sell.

“Sometimes you have to have faith,” he said.

These days such talk is considered heresy in some quarters. But the finance chief I just quoted is not alone. A recent survey of 464 senior executives sponsored by publishers The Economist Group found that 50 per cent of respondents spend money whether or not an ROI case has been proven. In fact, only five per cent say they never rely on gut instinct. Many agree that intuition is a big factor in making decisions.

I’m also willing to bet that many of you have managed to secure some big-ticket items based on nothing more than the knowledge that the goods you’re buying are badly needed, can’t help but do things better and may even help save a little money in the process.

Business philosophies tend to move like pendulums — swing too far one way and it becomes clear that a hole has opened up, a hole that is harming the business and needs to be filled. Thus the pendulum starts to slowly swing back, quickly approaching a happy medium. Too often though, it keeps on swinging to the point where the new process reigns supreme and begins to trump everything else, including the business itself. Out of this phenomenon were born mission statements; those corporate retreats where John from accounting walked over hot coals and everyone sings a song in the morning.

IT spending in the mid- to late-nineties was often done without proper oversight, thus an increased focus on metrics was welcome. But an overreliance on numbers takes away from your biggest asset — your people. Sometimes a CIO with 20 years of hard-earned experience just knows that a project is the right thing or do.

We hire people with experience for a reason. If making all judgement calls were as simple as punching numbers into a spreadsheet and seeing what comes out, we’d all be out of a job. On the bright side though, we’d all have much more time to stew over those crucial “should-I-buy-the-toaster-or-not” decisions while we lounge around the house.

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