With vendors, talk about returns is cheap

Summary:David Berlind bemoans Dell's lack of supporting documentation for the vendor's claims that it can save enterprises $200 per server a year with more energy efficient servers. Berlind isn't the only one with gripes.

David Berlind bemoans Dell's lack of supporting documentation for the vendor's claims that it can save enterprises $200 per server a year with more energy efficient servers.

Berlind isn't the only one with gripes. More often than not technology executives have projections for returns, but it's not clear how a project will turn out until you get started. In many respects, IT is like knee surgery--you don't know what you're dealing with exactly until you get scoped. Meanwhile, vendors complicate the buying process by doing one of two things:

--Claiming a hard dollar savings without providing conditions or the assumptions used to make those claims;

--Offering generalities that don't give you any hint of your ultimate ROI.

Neither approach gets enterprise customers closer to where they need to be. To be sure vendors are in a tight spot. A company like SAP or Oracle can never make a statement like "This implementation of MySAP will get you a return of 35 percent over three years." Why? These implementations are heavily customized in most cases and every company is different. Processes also play a big role in implementations. Another possibility: A vendor gives a target ROI and then gets sued if the customer doesn't get it.

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Some companies are getting better at providing some sort of return or total cost of ownership guidance, but the details remain spotty. Microsoft, which trying to convince CIOs to upgrade Vista, Office and Exchange at once, has posted a bunch of information to woo technology executives. Another thread is whether technology executives would buy hard numbers even if vendors provided them.

Ahead of the Vista launch, Brad Goldberg, general manager of the Windows Client Business Group, floated the TCO case for Vista to the press. In Goldberg's PowerPoint an unnamed major airline has projected IT labor savings of $100 per PC per year, an 11 percent decline in IT labor and a payback period in less than a year. Across multiple organizations, Microsoft's studies found Vista IT labor savings of $340 a year per PC.

The rub: Goldberg's PowerPoint presentation lacks footnotes. You don't have any idea how many workers an airline would rationalized, how many PCs are installed and what assumptions were made to make Microsoft's case. Training costs for a new OS and Office suite are also a wild card.

In other words, talk is cheap and vendor ROI claims may be cheaper. 

Topics: Government : AU

About

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CN... Full Bio

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