The most common reasons that prevent IT to reach full potential – 12th: Too long ROI

Long ROI can be a double-edged sword. Long ROI means that we maximized the initial investment in a solution by keeping it operational. Some people might think that maintaining a solution for a long time will save us money, but I would argue that if you passed four or five years of ROI you actually end up with a solution that costs you more from a financial perspective. Actually its even worse, you are going to end up with a solution that will eventually affect your business performance and growth.

Long ROI means maintaining systems for longer time. There are two downsides of maintaining systems for too long. As we maintain systems for longer time it gets expensive to perform regular maintenance. New requests usually end up with patches to the original solutions, which eventually make the system more complex to maintain.

Since technology and industry standards keep changing all the time, long term ROI solutions (I’m talking about 10, 20 and even more years) are always out of date from a technology and an industry standards perspective. Having such solutions doesn’t just cost from a maintenance point of view, you are paying very expensive toll from a business point of view as well.

Even if you saved some money, you are going to spend it all when eventually you are going to rewrite the solution, and rewriting solutions to keep your business competitive advantage is inevitable. When you are going to rewrite a solution this old it will cost you more time and effort. A potentially dangerous outcome of this ROI aspect is that if you’ll wait too long to rewrite your solution, you might end up being out of business.

The tricky part here is to find out how long to keep systems and claim ROI. In some point of time (and it’s different from industry to industry and company to company) you should realize that claiming for long ROI, actually puts your business at Risk. When you reach such insight, it’s better to move forward and rewrite your solution or to buy a COTS solution.

Too long ROI

About friedkin companies CIO

Friedkin Companies CIO
This entry was posted in Agile, Creativity, DevOps, IT. Bookmark the permalink.

One Response to The most common reasons that prevent IT to reach full potential – 12th: Too long ROI

  1. Pingback: The most common reasons that prevent IT to reach full potential – 13th: Just using tools | The Friedkin Group CIO

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