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MBA/MIS - 513

MBA/MIS - 513. Class #3 September 2, 2008 IT Business Value Financial Justification. Tonight’s Agenda. Brief Presentation on International Experience – Thom Porter Finish up Chapter 2 of Book A ROI Homework Q&A Book B – Chapters 1 and 3 Information Technology Business Value.

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MBA/MIS - 513

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  1. MBA/MIS - 513 Class #3 September 2, 2008 IT Business Value Financial Justification

  2. Tonight’s Agenda • Brief Presentation on International Experience – Thom Porter • Finish up Chapter 2 of Book A • ROI Homework Q&A • Book B – Chapters 1 and 3 • Information Technology Business Value

  3. Book BMeasuring the Business Value of Information Technology Information Technology Business Value (ITBV) Chapter 1

  4. Overall Goals • Move the IT department / process from a ‘cost center’ to a strategic partner to achieve overall goals • Prove ‘business value’

  5. What to measure? • Direct contribution to market position or revenues • Deliverables that support solving customer business needs and challenges • Direct cost savings • Technology investment that advance the industry

  6. Standards in Measurement • Standard metrics developed • Common valuation techniques with other corporate projects • Business value portfolio with values determined by business unit managers

  7. Grow your IT Success Framework Balance the budget needs while moving towards a ‘profit center’ What are the roles for the Bus Mgr versus the IT professional?

  8. Chapter 1 Summary • What are the implications for the Business Unit Manager pertaining to IT? • What are the implications for IT Professionals pertaining to assisting the business?

  9. Chapter 2 (Book B) Methods to determine Business Value

  10. Establish metrics and then monitor Notice these are not IT Metrics

  11. Suggested metrics should be corporate goals • Hospital (from text) • Utilization of beds • # of people for specific lab • Discharges by noon • Diversions • Patient Satisfaction • Staff Satisfaction • Doctor Satisfaction

  12. UNCW Metrics?

  13. Others?

  14. Once you have metricswhat do you do?(as it pertains IT?)

  15. Replacing Human Capital with IT Capital

  16. Productivity (Potential Gains) • Removal of an activity a user performs • Reduction in the time to complete an item • Reduction in user errors • Reduction in time to train new users

  17. Other ‘quantifiable’ items(suggestions, can you use for your project?) • Reduce Expenses • Material Discounts • Scrap Reduction • Hardware / Software Avoidance vs. System End of Life Considerations • Factory Uptime

  18. Other ‘quantifiable’ items(suggestions, can you use for your project?) • Reduce Expenses / Working Capital • Days of Inventory • Days of Receivables

  19. Other ‘quantifiable’ items(suggestions, can you use for your project?) • Increase Revenues • Reduce time to market • Open a new market • Cross Selling • Vendor of Choice

  20. Steps for IT project justification

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