3 Let the Other Guys Build It

When there's no avoiding spending money on software, it makes fiscalsense to stay away from software development, says Michael Radcliff,CIO of Ingersoll Rand, the industrial manufacturing company (2001profit margin: about 4.5 percent).

Radcliff says he lets vendors deal with software development. Insteadof customizing software in-house or allocating staff to developprograms, he gets his vendors to do the development and customizationwork on applications as often as possible. That way, the cost ofdevelopment is not borne by him, and there's an immediate ROIROI,Radcliff says. "It keeps the capital investment on the vendor'sbalance sheet. And if we're not spending money on development, we canput those funds toward deployment." Alles zu ROI auf CIO.de

Radcliff is rolling out a new finance initiative that will add optionsfor customers who want to lease, rent or buy items such as golf carts,air compressors or construction equipment from Ingersoll Rand businessunits. When he bought the software from a vendor (he declines to saywhich one), he gave its representatives a list of customizationrequirements and let them do the development. "We don't have a lot ofdiscretionary spending, so we have to be very, very careful where ourmoney goes," Radcliff says.