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Letter to the Editor

Letter to the Editor from Doug Hubbard, Hubbard Decision Research

To the Editor:

Your article ("The Science of Calculating Technology ROI," November 2001) was a good review of the basic issues. But, like most articles about this subject, there is not much focus on the fact that there are quantitative solutions to every "problem" in computing ROIs for IT.

For example, many of my clients have been in insurance and routinely use advanced actuarial methods for measuring risk in other aspects of business. Yet, I never find someone who is tasked to make a business case for an IT investment who is aware of how these methods can be applied to measure IT risk in an actuarially sound manner familiar to the CFO.

You might also be surprised to learn that the formula for the economic value of information is about 50 years old and has been widely used in other areas of business for decades. Ironically, IT seems almost uniquely unaware that there is a way to calculate the economic value of information (obviously, the primary output of information technology).

Thanks for the article. I know this is an important subject and I'm glad that your publication's writers are helping keep the subject in front of the CIOs.

Doug HubbardFounder Hubbard Decision Research (Glen Ellyn, IL)

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