The ROI Promise

A Real Return On Investment?

The “Return On Investment” promise, as understood by most of us, means if an end user spends money on a capital investment now, then, over time, the savings in operating expenses – thanks to better, smarter, and/or cheaper technology – will pay back the initial outlay of capital. This idea has fueled many industries since the beginning of time, but sometimes it may not be the whole truth.

When companies put together their ROI proposals, they aren’t trying to mislead; they can be telling the truth in the most attractive way. Projects are designed to suggest that clear lines separating professional, “prosumer”, and consumer technologies still exist. This can justify the higher cost of traditional professional systems. In reality, there has been an amazing sea change. Now, anyone can get a hold of the same technologies used by professionals — by picking up Final Cut Pro and Garage Band at the local electronics store — and give production a try.

Image: winnond / FreeDigitalPhotos.netThe proposed ROI solution will usually make perfect sense on paper.  The design features a TV facility, post-production house, radio facility, A/V system in a house of worship, or a similar production environment. Putting together a one-sheet, the provider wraps select technology around its product and projects that in some number of years, the solution will enable the buyer to make back the initial investment. This claim in turn leads to the idea that the product will eventually wind up being free, or even contribute to the facility’s revenue stream. The promise suggests the resulting reliability and performance will eliminate costly down time or lost connectivity, thereby saving the facility even more money.

Image: arztsamui / FreeDigitalPhotos.net

Sometimes, however, the fundamental flaw with this line of reasoning is that the provider builds the ROI argument inside a world where products exist on separate islands, and are surrounded only by complementary systems that work and communicate well with each other. But in the real world, products often have to work with legacy equipment, and then put new technology on top of it.

The ROI promise assumes that the new products going to these islands will operate without a hitch to external systems, but what really happens is that brand-new systems get put into the middle of existing plants. By necessity, new equipment and technologies are mixed with old. This is the nature of product development and deployment. By the time a technology has been widely deployed, the industry needs to come up with new standards that require the purchase of new systems. This migration from standard to standard is reflected in the shift from black and white television in the ’30s, to color in the ‘60s, digital in the ‘80s, and now our transition to HD, 3G, and 3D!

If It Is Too Good To Be True…

Technology doesn’t live in a vacuum; it follows the lead of designers, installers, and end users. Technology may affect how people behave, but, in and of itself, it doesn’t change human behavior. Humans resist change and will operate new technology in the same way they used old technology. Occurring along with the slow evolution of human behavior, the cycle of evolving standards and technologies makes it necessary for most facilities to integrate new technologies with existing systems. Together, these factors can make the ROI promise into the ROI compromise. While moving ahead is, of course, usually a good thing, if a promise seems too good to be true, then maybe the underlying compromises will require a much closer look.

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