Mind Your Financial RFPsBy Regina Kwon | Posted 2002-11-01 Print
Technology projects show a great return on investment (ROI). No, waitthey show very little. Hmm. Maybe it depends on your depreciation schedule?
Getting vendors to include a useful financial projection when responding to your request for proposal (RFP) is difficult enough. Trying to understand how the benefits from a particular kind of software could range from fewer clerical errors to $100 million in additional sales is another problem entirely. And it's one that needs to start with the RFP writer, says Tom Pisello, CEO of ROI software maker Alinean.
"CIOs are not being specific when asking for ROI," he says. "So what they get back pertains just to that product from that vendor." The result? "It's not apples to apples, and it's a lot of work to go back and mitigate the differences."
At the very least, understand what factors matter for ROI calculations, says Pisello (see downloadable checklist, below). The ultimate goal, however, should be an RFP template with guidelines for calculating ROI endorsed by your financial officer.
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