Gartner is a prominent research company that offers opinions based on market trends and its own investigations. The bulk of
Gartner’s business, according to Martin Reynolds, Gartner vice president and fellow, is the advice that it gives its clients
as to which vendors and strategies they should consider.
Gartner analysts make as many as 500 calls per year to enterprises and vendors, Reynolds tells me, giving each analyst deep
expertise in a particular technology. Gartner’s advice is all about avoiding risk and escaping what Reynolds says is a common
complaint among IT executives: “The system did exactly what we asked for, but it wasn’t what we wanted.”
As beneficial as Gartner, Forrester, or AMR Research can be in the decision-making process, however, there is an alternative
way to approach the challenge of deciding what technology to deploy. For that side of the story, I spoke with Ian Campbell,
CEO at Nucleus Research.
Nucleus takes an ROI case-study approach. Its research is based on its analysts’ assessments of recent deployments. “It’s
not what Nucleus thinks about a product, but what we’ve found about its use,” Campbell says. “ROI is the unyielding metric.”
Campbell’s company researches hundreds of ROI case studies in various vertical industries. That’s something Campbell, who
is registered with the National Association of State Boards of Accountancy, claims even highly respected research companies
don’t always know how to do.
“There is only one correct way to calculate ROI,” Campbell says, noting that analyst organizations do it many different ways.
For example, there’s the concept of “cumulative ROI,” where you add up the benefits of a project over a 10-year period. Campbell
says that’s like putting $100 in the bank and getting 10 percent interest each year. Is it correct to say that over 10 years
you received a 100 percent return on investment? No. After 10 years, it’s still 10 percent.
“If I have a project that’s a dog, all I have to do is go out long enough and it will be positive,” Campbell warns. He also
says to beware of vendor-initiated case studies. If you hear of some marquee enterprise-level company extolling the benefits
of a given solution, Campbell suggests calling the company directly. You may hear quite a different story than what was in
written in the marketing brochure.
Furthermore, Campbell says to never look at TCO; it’s just the cost side of an ROI equation. If you had to choose between
two products — one that was a royal pain to deploy and required five people to manage versus one that required only one person
— and then found that the pain-in-the-butt solution would bring in hundreds of millions of dollars more, which would you choose?
Finally, Campbell says that when you’re looking at ROI, keep in mind that just because someone else achieves a good ROI doesn’t
mean you will. ROI is unique to a particular company. The only thing it measures is how big of a step your company was able
to take: from how bad off it was to how much better off it is now.
Both approaches have value. In fact, Reynolds and Campbell each actually had good things to say about the other’s methodology.
If you want to obtain the most complete picture of a product or technology, you just might have to use both.
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