Forecast, Foresight and RoI

Whenever technical person take a business proposition to business owners in any typical business, the first question asked is “What is RoI?”
Is this question correct? Before reaching to answer let us consider few scenarios.

Scenario 1: Foo Inc has its HRMS developed in house. With growth in number of employees and globalization of business, current HRMS is not able to keep pace and requires frequent tweaks and hacks to do the job. This is leading to broken HRMS and potential disruption of services and day by day increasing cost while maintain the system. The proposals to change current HRMS by some contemporary HRMS – Self hosted or SaaS are in wild.

Scenario 2: Bar Corp is in groceries retail business and has stores across countries. Its PoS (Point of sales) system is working great and designed and developed in late eighties. The programming languge used is Basic C. Even today (2011), system is working fine for current needs. Bar Corp management has foresight for market in China, which has entirely different legal system, language requirements. Should Bar shift to contemporary technology?

Scenario 3: We are in 1990. QUX LLC is in investment banking. Its computer systems are rock solid and rely heavily on Mainframe. New technology and paradigm are emerging. Java on UNIX and distributive technology is seen as next game changer. Internet is seen as bright star on horizon. Should QUX LLC start evaluating Internet, Java and UNIX?


In the three scenarios built above will ROI justify the investment? In case of Foo Inc ROI certainly a justification but apart from ROI addition decision criteria comes into picture: Should employee data be on cloud or internal? In case of Bar Corp, lot of speculation and unpredictability comes into picture. Certainly RoI is the decision criteria here. For QUX LLC do I have to argue?

The picture is very clear, when ever forecasting is involved, ROI argument hold good but for foresight ROI is the criteria.