Columns

Remarks from the editor-in-chief: It’s all about the benjamins

• By Michael Alexander
• January 1, 2005

Three of the feature stories in this month’s issue look at return on investment from different angles.

Everyone in IT recognizes the value of integrating applications. As Alan Radding writes in “Integration’s dividends ,” the trick is proving it pays off. Why is building the ROI case for enterprise application integration such a challenge? The main reason is that the payoff is difficult to quantify in a way an accountant might understand. What’s it worth to improve customer service or streamline a critical business process? It’s hard to stick numbers on things like that. Still, if you’re looking to spend six figures on integration, you must be able to prove it’s worth the investment. Radding was able to dig up a few organizations that have found ways to do it.

In “The enterprise gets on the bus ,” George Lawton writes about the enterprise service bus, which aims to make it easier for enterprises to integrate their apps, whether these apps are in house or across the Internet. “ESB is the nervous system people have been talking about,” says one analyst Lawton interviewed.

Here’s another instance in which everyone agrees an enterprise service bus is worth doing—even necessary—although it’s difficult to quantify why that’s so. As Lawton writes: ESB will have a huge influence on an enterprise’s architecture, but the dollars spent on it will be hard to track because they will be part of the overall value of IT projects.

No one worries about making a case for offshoring, on the other hand.

A programmer here costs $100 an hour and over there costs $10 an hour, or something like that. The math is simple and the ROI is easy to prove. Or is it?

Outsourcing has lost a bit of its shine, writes Alan Earls in “Offshoring pays off, but not as much as you think .” In countries such as India, demand for programmers has led to wage hikes, and turnover in some markets is in the double digits because companies and coders are always maneuvering for better opportunities. Meanwhile, Earls writes, American wages have fallen from the peaks they reached in the dot-com era. The net result is that the wage gap between here and there has narrowed considerably.

I want to put in a quick word about our new DE-CODER section at the front of the print edition of ADT magazine. We’re no longer going to run news items. From now on, we’ll bring you some of the quirky, offbeat, and gee-whiz stuff that goes on in the business of software. Think you’re smart? Be the first to answer our question of the month and get a couple of free books.

It’s our idea of ROI.