Enter the Research Firms

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Microsoft, Sun and other technology vendors are pushing economic analyses along with their products to potential customers. Does it make sense to pay attention to the results?

Enter the Research Firms

Tech vendors aren't the only ones looking to cash in by peddling new metrics during the technology investment drought. Research firms are getting in on the act as well.

Stamford, Conn.-based Gartner more than a decade ago coined and pioneered the idea of "total cost of ownership," a method of calculating all up-front and ongoing technology costs. Next month Gartner is slated to unveil a whole new set of metrics, which it is calling "total value of opportunity,'' or TVO, as a successor to TCO. With TVO, Gartner wants to establish a market basket of 36 metrics that best measure revenue gains, cost savings or other value generated for a company by the deployment of a project.

Among the early sponsors of the TVO project: Asera, Cognos, Hyperion Solutions, Intel and Microsoft.

Audrey Apfel, a vice president and research fellow at Gartner Measurement, says the basket of metrics will include measures of on-time delivery, quality of materials, time to market, success in turning research into commercial products, market share gains, performance of technology departments and similar benchmarks that relate to the creation of value for companies.

In effect, Apfel says, the approach will "bridge the gap" between the market value of a company's assets and the book value. And the values will be expressed in business terms, for the "gabillions of technical and business people" who need a common language to assess the value of technology projects.

Giga Group, likewise, has been touting its six-year-old TEI analysis service as a way to use metrics as a common language between business and technology leaders. Above all else, TEI gives companies a way to pitch marketing to technology departments, explains Chip Gliedman, a research fellow with Giga.

Gliedman quips: "What's the value-add of a person at the United Nations translating Chinese to Spanish? That's the value we are bringing here."

—Additional reporting by Tom Steinert-Threlkeld and Kim Nash

This article was originally published on 2002-05-15
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