Developing and communicating the justification of it projects
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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.

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Three components
Three Components Projects

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
The Strategic Business Case Projects

  • 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.


The business case
The Business Case Projects

  • 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.


The roi irr analysis
The ROI (IRR) Analysis Projects

  • 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.


Warning about the roi analysis
Warning About the ROI Analysis Projects

  • 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.


The post project audit
The Post Project Audit Projects

  • 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?)


Questions for class discussion
Questions for Class Discussion: Projects

  • 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?


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