The King is Dead, Long Live the King.

However, here, I am not talking about royalty, but ROI (Return On Investment).  Businesses have long used the ROI metric to determine the best areas for investment, e.g. if I invest $1 in this area, will I get back $2?  $1.50?...etc, compared to investing in another area.  The objective is to maximize revenues and reduce costs.  However, this tool generally works best in areas where tangible goods are being produced, bought, and sold.  There is cost to producing the good, cost to market it, operating costs to selling, and possibly maintenance costs.  The revenue is the price of the good, paid by the customer and sent to the company's coffers.

The situation is somewhat different in an IT setting.  IT is almost exclusively a "service" industry, since there are not really any goods in IT - just bits and bytes of data in computers that are easily replicated and distributed.  The entire organization in IT is a cost center, servicing customers and providing IT infrastructure.  In the traditional ROI business model, the goal would be to minimize the amount of money spent in the IT department to bring down costs.  Many organizations attempt to do just that by minimizing bonuses and perks, buying outdated equipment, and discouraging activities (such as professional development or investigation of new techonlogy) that don't contribute to the immediate bottom line.  This is a short-sighted approach, however, since the hidden costs to this behavior rapidly become obvious: discouragement and demoralization of IT staff, obsolence of equipment and technology leading to competitive disadvantage, regular breakdowns in infrastructure (often blamed on the IT staff!), etc.

Scitent follows the Google approach to investment: Provide the best equipment possible to the best people possible and gain every possible advantage over competitors in terms of technology, talent, and infrastructure.  Scitent does not use the traditional ROI model because ROI fails to take into account the hidden costs (which are relatively small in a goods-based company, but can be lethal in a services-based  company).

ROI is dead.  Long live ROI.