Leader in "Real ROI"Examines Trends in 10 Key IT Sectors For 2003, Outlines ROI Opportunities and Potential Pitfalls

Nucleus Research, a fast-growing analyst firm focused on providing CFOs of IT and CIOs with the expertise they need to evaluate the return on investment (ROI) from their IT investments, today unveiled its "ROI Almanac" for 2003. According to Nucleus Research's analysts, trends in business intelligence and enterprise application integration are most likely to drive increased ROI. Conversely, product lifecycle management investments are most likely to provide mixed or negligible returns, and others are mixed. The Almanac is the latest addition to the ROI-focused information Nucleus provides for CIOs, CFOs and "CFOs of IT" as part of its new, guaranteed ROI Advisory Service.

The full "ROI Almanac" can be downloaded from NucleusResearch.com.

"Right now, in a tight economy, return on investment is imperative, whether you're talking about trucks, buildings or enterprise application servers," said Rebecca Wettemann, vice president of research for Nucleus Research. "Our ROI Almanac helps CIOs and CFOs of IT understand where key technology areas are heading in terms of ROI – and which technology investments are likely to bear more fruit in the future."

Trending Positive

According to the Nucleus report, technology sectors with the potential for positive ROI impact include:

• Business intelligence: Vendors are adding planning, budgeting, forecasting, and predictive modeling to their BI suites. Provided vendors keep their prices steady, the marriage of reporting and planning tools will make it easier for managers to act on the analyses provided by their BI tools.
• Integration servers/EAI: Vendors are enhancing and promoting the value of their built-in business process managers (BPMs), which provide business users with a graphical interface within which they can design and redesign process flows. By simplifying one of the most time-sensitive aspects of application integration, BPM modules can significantly reduce the cost of integration and ongoing application development.

Sectors with trends producing a mixed or negligible ROI impact included:

• Supply chain management: A growing number of vendors are looking to increase the efficiency of their solutions with radio frequency identification (RFID) systems. Significant ROI might come to a large manufacturer with a complex internal supply chain, high transport costs, and more than 100 workers devoted to the scanning of bar codes for logistics. For other companies, RFID is too costly a gamble.
• ERP: ERP vendors are involved in intense competition for the middle market, and are striving to attract a larger volume of customers with solutions designed for medium-sized enterprises. Like large enterprises before them, though, mid-sized businesses will discover that they must either spend more than they planned for customization or take on a business process re-engineering project they didn't expect.
• Product lifecycle management: Vendors are expanding the range of "industry-specific" offerings, especially for underserved sectors like consumer-packaged goods (CPG). This has bridged the divide between vendors servicing discrete manufacturers and those serving process manufacturers. Nucleus advises a "wait-and-see" approach, as PLM vendors will need more time before they can best support both discrete and process manufacturing data requirements.

ROI: Consider the Source

With the increased emphasis on ROI driving major technology initiatives, Nucleus Research recommends that corporate decision makers be especially wary of:

• Partisan ROI white papers: To be useful, a case study must come from a fully independent source, not a vendor's marketing team.
• ROI "calculators": These tools take a "black box" approach that take a few parameters to calculate an ROI without revealing key assumptions that power the figures.
• Silence about costs: Most technologies have the potential to provide benefits of some kind, so a vendor's ability to paint a picture of enhanced business performance and efficiency, all enabled by one investment, is worthless unless coupled with "straight talk" about how large the investment will be.

About Nucleus Research

Nucleus Research is an independent global research and advisory firm that provides CFOs and CIOs with the financial and technology expertise they need to evaluate and manage their information technology investments the same way they evaluate and manage other capital investments. Nucleus Research is the first firm of its kind to blend "Big Four" financial analysis with comprehensive technology expertise to deliver 100% impartial return-on-investment (ROI) data and financial analysis services to organizations worldwide. Nucleus Research uses an uncompromising set of processes and tools to evaluate the financial return on IT assets throughout a technology's life cycle, from selection and deployment to upgrade and retirement. Nucleus Research's ROI assessment methodology can be applied to virtually any technology investment.

The company was founded in 2000 by former senior executives from International Data Corp., Dataquest, AMR Research and Forrester Research, and is headquartered in Wellesley, Mass., with additional offices in London and Paris. More information can be found at NucleusResearch.com.