1 / 8

Developing and Communicating the Justification of IT Projects

Developing and Communicating the Justification of IT Projects. Three Components. An IT project justification consists of three parts: The strategic business case (qualitative) The ROI analysis (quantitative) The post project audit (accountability ). The Strategic Business Case.

maire
Download Presentation

Developing and Communicating the Justification of IT Projects

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Developing and Communicating the Justification of IT Projects

  2. Three Components An IT project justification consists of three parts: • The strategic business case (qualitative) • The ROI analysis (quantitative) • The post project audit (accountability).

  3. The Strategic Business Case • The strategic business case is the most important component • The strategic business case component is derived from the IT Alignment strategy • Answers the question: “What strategic business goal will not get done, or will be hampered, by not successfully completing this IT project?” • This component of the IT Project justification tends to be more qualitative than quantitative • This component carries more weight with just about everyone of the CXO’s other than the CFO.

  4. The Business Case • For Project #1 homework, do the best you can at showing • What strategic business initiative(s) in your company need this IT project • How it (they) will be facilitated by this IT project • How it (they) will be hampered by not successfully completing this IT project.

  5. The ROI (IRR) Analysis • The costs and the tangible benefits are the easy part • The intangibles are the hard part • Over optimistic intangible estimates damage your credibility and your ability to do the CIO’s job • Too conservative estimates may result in a valuable project not being funded • Remember: The dollar valuation of the intangibles MUST NOT be perceived to be an “I.T. number” • Secret to credible effective intangible estimating: get the other CXO’s to weigh in and then let the CFO assign the final intangible numbers to the project • Takes a lot of coordination and communication (but this is good for your career and the future effectiveness of IT) • Takes more time • Keeps your neck out of the noose.

  6. Warning About the ROI Analysis • Don’t get too detailed • This is only a rough estimate (it can’t be more than that) • Not done for smaller projects, you must decide where the threshold is • DO NOT rely on ROI analysis alone to make resource allocation and prioritization decisions—the business case will likely carry more weight.

  7. The Post Project Audit • Answers the two questions: • “Did the IT Project accomplish what it was intended to do?” • “How can we do a better job of estimating benefit next time?” • Planning for post project audit: • use ROI calculations to generate metrics that will be used in one year to measure success • How will you measure the impact on strategic business initiatives • BEFORE the project goes up for funding approval, you must assign specifically: WHO will take WHAT measurements HOW and WHEN and to WHOM will these be reported • Sometimes, this pre-planning for post project audit will change focus, priority and approach for the IT project! (For class discussion: Why?)

  8. Questions for Class Discussion: • What are the three components of an IT Project Justification and why are all three important? • What are the political parts of an IT Project Justification and how will you do these in your company? • What happens if you skip the Post Project Audit planning? • What if you did all this work for a large IT Project and it didn’t get approved? Was this all a waste of time?

More Related