
322 Operational Risk Control
15.4 An example of controllable technology spending
Without standards against which to gauge our performance, there can be no
documented opinion regarding how well or how badly we are doing in our job. Every
well-managed company should look at the overhead of Berkshire and TIAA as the
strategic frame of reference – while standard costs assist in providing the tactical
framework for cost control and overhead expense. An equally important standard is
to require managers to spell out return on investment (ROI) on the expenditures they
ask for.
The calculation of an objective return on investment must take into account not
only ...