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Measuring IT Project Impact: Tangible & Intangible Benefits

Learn methods to measure the business value of IT projects, including productivity studies and intangible benefits evaluation. Explore examples, metrics, and recommendations.

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Measuring IT Project Impact: Tangible & Intangible Benefits

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  1. MBA/MIS - 513 Class #4 September 4, 2008 Measuring the Impact of IT Projects Tangible and Intangible

  2. Avery CloudCIO New Hanover Health System

  3. Tonight’s Agenda • Guest Presenter • Avery Cloud • Questions on the homework • Measuring Employee Productivity

  4. Due next week - Monday • ROI Exercise • Upload to Entropy as a .doc, .docx, .zip by Monday at 6PM • Justify your recommendations • Show your work

  5. Due next week – Monday (Cases) • Building IT Infrastructure for Strategic Agility Phill, Mary, Lisa, Jonathan, Lorie • Volkswagen of America : Managing IT Priorities • Jonathan, Susanna, Chris, Donald, Brian

  6. Due Next Week - Thursday • Royal Caribbean Cruise Line Case • Upload to Entropy by 6PM on Thursday • Please read the suggestions in the syllabus on how to approach • Business Professional • Executive Summary (1 page max)

  7. Executive Summary

  8. 3 to 5 more pages • No more than 1 / 2 page summary • You can answer 1 or more of the following • What is/are your recommendation(s) • What new IS knowledge was learned • How does the case (situation presented) impact the competitive position of the firm • How does IS/IT complement their corporate strategy • How may the case relate to your current or past employment

  9. Book BMeasuring the Business Value of Information Technology Measuring Employee Productivity Chapter 4

  10. Business & IT Managers • Necessary to develop productivity measures • Conduct experiments • Use statistical methods • Consider ‘pilot studies’

  11. Building a plan to measure employee productivity

  12. Means to gather data: • Interviews (semi structured) • Surveys (structured) • User activity logs • Server activity logs • Field studies (watch faculty) • Lab study

  13. Methods to collect data

  14. Methods to collect data

  15. “Important to include at least one quantitative measure as part of every productivity study”

  16. Methods to gain ‘quantitative’ data • Pilot Study – • Very important if a new technology and prior experience is not known • Collaborating with Third Parties • Has a ‘non competing firm’ implemented the technology?

  17. Consider:Does entropy improve faculty/Student productivity? Reason: Should we expand Entropy outside of the IS department?

  18. What means would you use to gather data? What items might you want to measure?

  19. Intangibles

  20. What are intangible benefits? • There are two main intangible benefits in IT investments. The first is internal improvement or infrastructure investment and the second relates to customers • Grembergen • Examples may include: • Change in the production process • Retained customers • Increased sales • Customer satisfaction • Market gain

  21. Do companies measure? • 41 companies surveyed found that most ASSUMED benefit would follow from projects • Why Not? • Intangible value is extremely hard to measure.

  22. A study of 20 Wilmington area companies reported these problems with IT Projects

  23. Recommendations of IT community

  24. Intangible Examples

  25. Intangible Examples

  26. Intangible Metrics • Risk impact • What is the cost of a negative event if we avoid an investment • What is the value of a lost customer? • What is the value of a lost employee? • What is the value of dropping to a 90% service level versus 95%

  27. Intangibles should be measured • Users need to determine the value in advance • Users need to have a measuring technique and sign off

  28. What Intangible Benefits would accrue for Expansion of Entropy and how would you measure them?

  29. Exercise • We know a customer spends $250/year • A system has been proposed that will provide our call center with a record of past customer calls and details of those calls? • How / what - would you measure the benefits of this project?

  30. What should we measure?

  31. Exercise • How do you measure success in your department/company? • What are your measures for good performance? • What data is critical and who generates this data?

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