Tuesday, August 15, 2006

Real Technology ROI

I recently reiterated that there is no ROI for security (except for Road House). This is obviously not true for all technology. While traveling recently I saw technology with real ROI in a taxi. Think of the effect of deploying radios in taxis. Before this invention, cabs relied on getting assignments through a central dispatcher at their home station. Sure, they could be flagged down by a passer-by, but otherwise they returned to base for a new job.

Now spend a little money to install radios in everyone's cab. Suddenly the cab that would previously have to return to home base to get a new assignment can be dynamically re-tasked to a waiting passenger nearby. A cab that only ran two dozen passengers per shift can accommodate double that number, hardly ever returning back to base. That's called an increase in productivity -- the source of real economic growth -- and real ROI.

Staying with the taxi scenario, you may have heard of technology to avoid collisions. You might think "That has real ROI. Install the collision avoidance system and suffer fewer crashes. Fewer crashes mean lower insurance premiums and fewer payment of deductibles when getting repairs." It sounds like ROI, but it's not -- it's loss avoidance. You are not becoming any more productive; you're avoiding a cost. That's what security spending is -- loss avoidance.

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