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Buggy whip manufacturers in the early 1900s are a classic example of businesses not understanding what business they’re in and suffering the consequences. The textbook answer is that they needed to think of themselves as being in the transportation business with a focus on transportation accessories.

Like buggy whip makers, IT faces a similar challenge when defining its focus.

Any “business” that spends a lot of money should give some thought to the possibility that it is in the capital investment business. The measure of business effectiveness is return on investment, or ROI. Capital naturally flows to those who provide the best return.

Before IT can earn and prove ROI, it needs to define its focus within the broader designation of capital investment (e.g., buggy whip makers weren’t simply in transportation, as IT isn’t simply in capital investment).

That focus can be determined by the interfaces for the technology on which money is being spent. If the interfaces are mainly for IT technicians, the focus is business process support. Public interfaces indicate a concentration on sales, marketing and service support. Interfaces used mainly by employees reveal an emphasis on employee productivity.

Once a focus is understood, IT can get to the business of figuring out what is needed to optimize ROI. Inspiration can be found in the supermarket dental care aisle.

Unlike buggy whip makers, toothpaste manufacturers understand what business they are in: the personal care business with a focus on oral hygiene. Toothpaste is their primary product, but they also offer related items such as toothbrushes, dental floss and mouthwash. Some products, such as the toothbrush, are clearly needed in order to use the toothpaste. Others, such as floss and mouthwash, contribute to the goal in ways that toothpaste can’t.

Once a focus is understood, IT can get to the business of figuring out what is needed to optimize ROI. Inspiration can be found in the supermarket dental care aisle.

By knowing their focus, they can figure out how to optimize ROI. (Plus, toothpaste makers know that if they don’t manufacture and sell the flosses and mouthwashes, another company will.)

Back to IT: If IT understands its focus within capital investment, it can deliver what’s needed to boost ROI and become a strategic force for moving the business forward rather than an expense to be minimized.

The question for IT leaders is, Are you putting all the right products on the shelf?

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