Jul 24 ’08

Compliance Options: The ROI of You

by Editor in z/Journal

When the economy is in trouble, all responsible leaders look at their organizations and expenditures and ask themselves, “Do we need this?” I’m guessing you don’t want your leader to look at you, ask the question, and answer, “No, I don’t.”

What can you do about this? It’s hard to prove value when you’re working deep in the bowels of IT or data management. It can be even harder when you’re assigned to work on compliance efforts rather than “sexy” projects that are generally accepted as being important for the organization’s bottom line. And it can be especially challenging if you’re in a culture where value is defined in terms of Return on Investment (ROI).

Although it’s hard, you can do it. If you understand the value of your contributions, and can express it using information that’s important to and will resonate with your leaders, then you can demonstrate your own personal ROI.

First, of course, you need to understand how ROI is calculated. It’s a simple formula:

ROI = (benefits – cost) x 100%

In other words, you can calculate your ROI if you know just two numbers: the cost of the investment and the value of the benefit derived by that investment.

In terms of your contributions, let’s think about what you cost your company last year. Caution; it’s more than your annual salary. When you consider benefits, time off, overhead activities, your share of administrators’ time, and the company’s cost to provide you with a place to work, the actual number may be as high as twice your salary.

Now let’s take a portion of that number, say $50,000. During the amount of time that you cost the company $50,000, what was the value of the benefits you provided? If it was exactly equal to the cost ($50K), then the ROI for you is exactly 0 percent [(50-50)/50 x 100%]! Not a ringing endorsement, is it?

What if you provided $60K value in the same time period? Then your ROI would be 20 percent [(60 - 50)/50 x 100%]. If you provided $100K value in the same time period, your ROI would be 100 percent [(100-50)/50 x 100%]. And if you provided $200K value, the ROI for you would be 300 percent [(200-50)/50 x 100%].

Estimating the Value of Your Contributions

So how do you derive a number to show the value of your contributions? Those of us who work with data probably don’t have just a single project to point to. We touch a lot of efforts—and our contributions to them can add up.

Executives look at three types of value:

• Increasing revenue or the value of assets
• Reducing cost or complexity
• Managing risk, ensuring compliance, or increasing their confidence in what they’re attempting.

Look at the first two categories first. Did you participate in an effort that’s getting credit for increasing revenue or managing cost? I’ll bet you did! What percentage of the project’s cost were you? How important were your contributions? Chances are, your efforts were a drop in the bucket, but delivered a lot of bang for the buck.

It’s in the area of compliance, however, where your ROI might really be impressive. Nearly every organization has a mandate these days to protect data, whatever the cost. They do it because the cost of non-compliance is prohibitive. In other words, the ROI for compliance is very high.

So maybe it’s time to take a new look at your status reports and elevator speeches about what you work on and what you accomplish.

You may actually think that designing, implementing, or executing data protection controls, managing permissions, and preparing reports for auditors is boring. But it’s possible that a company leader faced with a hard decision will look at what you contribute and be impressed with the ROI of you.