CONCORD, MA (March 16, 2004) - Based on its extensive experience with hundreds of IT solution vendors, Gantry Group has established the first ROI assessment quality standards that promote use of sound methodology and proven guidelines to produce more accurate, reliable ROI analysis.
"As a result of Gantry's 3,000+ ROI modeling interviews we concluded that lack of objectivity and absence of customer validation are two issues of great concern for enterprises being presented with an ROI calculation by an IT vendor," said Dale Troppito, managing partner at Gantry Group. "Even more importantly, enterprises overwhelmingly stated that credible ROI models must be based on analysis of how an IT solution would impact their companies at the business process level."
A complete list of the 10 ROI Best Practices can be found at http://www.gantrygroup.com/what_we_do/index.htm. Some of the best practices include:
- Alignment with Strategic Objectives: ROI calculations of IT solutions should be based on value drivers that reflect the customer's actual strategic objectives, demonstrating the likely impact of the solution on that company's business performance metrics.
- Outsource Studies: ROI models developed in-house either by the IT vendor or the enterprise buyer are not viewed as credible by purchase decision-makers.
- Measure Bottom-Line Effects: ROI tools should generate expected economic return using only value drivers that measurably affect the bottom-line. Trying to quantify intangible benefits erodes the believability of the entire calculation.
"Using ROI best practices benefits everyone - the IT vendor and their customers," added Troppito. "ROI best practices set the bar on what to expect from an ROI assessment. With objective, sound ROI modeling principles IT vendors are better able to create an environment of trust with a prospect which is ultimately a key to closing a sale. The enterprise customer is better able to understand the business rationale for an IT investment. A proven ROI calculator can even assist with optimizing purchase decisions such as price structure (license versus subscription) and implementation timing."
The Gantry Group's best practices initiative was motivated by clear feedback from enterprises and IT vendors about the growing inconsistencies, disparities, and ad hoc approach to ROI assessment. Accordingly Gantry Group surveyed its IT clients and their deployed customers to determine expectations, requirements and concerns regarding ROI assessments. This information was then analyzed to distill the key issues and translated into a set of clearly articulated best practices for ROI analysis.
"Businesses are under growing pressure to ensure transparency of their business transactions. Our experience indicates that enterprises demand open access to underlying calculations in ROI assessment," said Dawna Paton, managing partner at Gantry Group. "ROI calculations with adjustment factors are regarded as highly subjective by enterprises and can throw the accuracy - and the credibility - of the entire ROI analysis into doubt. IT vendors who adopt ROI best practices can avoid customer skepticism, shifting a defensive sales situation into a consultative session."
About Gantry Group
The Gantry Group is the only management consulting firm specializing in technology ROI. The Gantry Group's ROI impact analyses are validated by primary market research to ensure accurate capture of the real value drivers and costs. With over 200 technology clients, 3,000 business process interviewers and profiles in their knowledge base, and more than 1,000 ROI business processes and value drivers modeled, Gantry offers its clients the greatest depth and breadth of ROI experience and invaluable objectivity. Since 1997 Gantry Group has provided ROI Calculators, Benchmark Studies, White Papers, Case Studies and ROI Sales Training Materials for hundreds of technology companies in healthcare, financial services, mobile/wireless and business process optimization. Gantry Group's client list of technology vendors includes leading IT vendors such as PeopleSoft, McKesson Health Solutions, Thomson Media, palmOne, Xerox, Politzer & Haney, and Best Software. For more information on The Gantry Group and the services they provide visit www.gantrygroup.com
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