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REJ from Microsoft Chris Gibbs November 5 th , 2007 MBA 731 PowerPoint PPT Presentation


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REJ from Microsoft Chris Gibbs November 5 th , 2007 MBA 731. What is REJ?. Microsoft Rapid Economic Justification (REJ) Guide Designed to look at ROI faster than a traditional ROI study Allows completion of the project assessment process in two to four weeks

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REJ from Microsoft Chris Gibbs November 5 th , 2007 MBA 731

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Rej from microsoft chris gibbs november 5 th 2007 mba 731

REJ from Microsoft

Chris Gibbs

November 5th, 2007

MBA 731


What is rej

What is REJ?

Microsoft Rapid Economic Justification (REJ) Guide

Designed to look at ROI faster than a traditional ROI study

Allows completion of the project assessment process in two to four weeks

Assists in planning by establishing benchmarks to identify which IT investments make sense

Helps focus on the business aspects of a vision, assisting in identifying the stakeholders, the key measurements of success, and the alignment of processes to be improved by mapping them to critical success factors

More than 2,000 REJ projects have been conducted by organizations around the world since 1997


Rej concepts

REJ Concepts

The REJ framework provides:

Process: Step-By-Step Approach

Tools and Content: REJ Workbook in Excel, ROI and TCO calculators; data, research papers, reusable evidence, documented patterns, etc.

Deliverables: Templates, courseware, videos.


Rej usage where and when

REJ Usage – Where and When

Environments where business conditions change rapidly

Traditional ROI cost or time prohibitive

“Pretty close” is sufficient accuracy

Lack of long term attention by stakeholders

Scenarios where there is no effective way to obtain the data needed to assess the benefits of a specific IT initiative


Rej trigger points

REJ Trigger Points

Fiscal year planning

Synchronization with line of business activities

Competing for best use of scarce resources

Emerging technology recognized

Transparency for relevance in portfolio

Lack of executive sponsorship


Rej project initialization

REJ Project Initialization

Planning an REJ project includes the following work:

Assess how the final financial decision will be made

Communicate with each potential stakeholder

Identify the desired structure of the final deliverable for all stakeholders

Set expectations for REJ project activities

Identify required resources

Plan the REJ kickoff meeting


Rej phases

REJ Phases


Sample activity identify key performance indicators

Sample Activity: Identify Key Performance Indicators

Task 1: Identify the KPI that is essential for each stakeholder to achieve his or her mission.

Task 2: Identify KPIs that represent the current and desired states. Then conduct a gap analysis that identifies the order of magnitude of what the IT initiative must accomplish to meet the desired state.

Task 3: Verify that the IT initiative is aligned with selected stakeholders.


Sample activity identify key performance indicators1

Sample Activity: Identify Key Performance Indicators

Inputs

Does the organization have a balance scorecard?

Does the stakeholder have a dashboard?

What is in the monthly or quarterly report that the stakeholder provides to the organization?

Does each specific KPI directly map to the appropriate CSF and stakeholder?

Is the KPI measurable?

Does the stakeholder have current-state benchmarks for each KPI?

Outputs

The Business Assessment Roadmap with all KPI-related information filled in for each CSF.


Sample activity identify key performance indicators2

Sample Activity: Identify Key Performance Indicators


Rej end result

REJ End Result

Economic Justification Report consisting of

Executive Summary

Gap Analysis

Proposed Solution

Benefits Analysis

Cash Flow Projections

Risk Assessment

Financial Ratios and Decision Making Point

Appendices

Details

Sources

Assumptions

Calculation methodologies


So why do we care

So, Why Do We Care?

Economic justification provides the answer to questions that executives need to know before they approve an investment, such as:

How much will it cost to reach those benefits?

Has anybody optimized this project from a ROI point of view?

How soon will the business sponsor see the effect on the business activities and processes?

How does this investment compare to other ways we can use our capital?

REJ helps IT managers identify targeted business benefits that justify the use of resources and the risks during change


Alternate approaches to rej

Alternate Approaches to REJ

Traditional ROI

REJ doesn't consider heavily the time value of money

REJ attempts to quantify issues difficult to account for in a ROI study, such as reduced time for developing marketing collateral and enabling better communications

Gartner’s Total Value of Opportunity (TVO)

Used to develop sophisticated ROI assessments

Links IT capabilities to business performance improvements

Assists in measuring the impact of IT projects

Establishes 36 metrics that best measure revenue gains, cost savings or other value generated


Sources

Sources

“Build an airtight business case for new IT Adjustments” Microsoft. 12/12/2005. http://www.microsoft.com/business/enterprise/value.mspx

“Rapid Economic Justification Guide” Microsoft. 2005. http://download.microsoft.com/download/d/5/9/d59bf238-969a-4167-8203-90348e0e2628/REJ_Enterprise.pdf

“Rapid economic justification service” Fujitsu. http://www.fujitsu.com/au/services/solutions/microsoft/portfolio/

“The ABCs of ROI” Curtis Franklin. April 29, 2002. http://www.networkcomputing.com/1309/1309ws1.html

“Use this cost/benefit model to prove IT value to clients” Rick Freedman. http://articles.techrepublic.com.com/5100-10878_11-1039315.html

“Gartner Total Value of Opportunity” Gartner. http://amt.gartner.com/TVO/


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