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Deriving Benefits to IT Project

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  • #26192

    Taylor
    Member

    What approaches or tools would others recommend to pull out benefits of a project?  My main obstacle has been 1) asking the right questions to pull out potential benefits and 2) quanitifying benefits beyond “Cost Avoidance”
    I would be very interested in any ideas on tackling these 2 issues.
    Let’s Roll!
     

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    #63691

    Bob J
    Participant

    Todd,
    If your are looking for hard savings, I would recommend that you sit with your financial guy/gal and identify the current cost drivers related to IT for at least a year (preferably 5 years if you can get it).   Ensure (if possible) that you get the actual spends and not just budgeted amounts.  Take this data to your senior manager and discuss the cost drivers in the context of the overall goals and direction of the group as well as current project activities (you don’t want to conflict).  Contrast cost drivers with “difficulty to impact” in this context and look for those areas that might lend themselves to yielding the most significant improvement with the least amount of business resources (your time included).  These will be your best project areas for hard savings….
    Hope this helps…
    Best Regards,
    Bob J

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    #63693

    John J. McDonough
    Participant

    Ideally, benefits from I/T projects are the result of work process changes in the partner organization.  In a perfect world, you would work with the partner to design the ideal “should” work process, then deliver the software that enables that work process.
    In practice, it is often more effective to use that “should” work process to identify the best fit COTS software, then adjust the work process to fit the software.  Sometimes this can result in additional leverage that wasn’t realized in the initial look at the work process, but sometimes the reality of what is available within the budget means that not all the desired benefits will be realized.
    Often the partner organization would like to avoid changing anything.  In that case, then any I/T investment is wasted and should be avoided.
    Benefits to the I/T organization itself are at best a tiny fraction of the benefits that can be gained from improving the partner work process.
    –McD
     

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    #63694

    T. Ratlff
    Member

    Typically benefits are not realized until after the project is completed and the new process/tool or other deliverable has become institutionalized.  A technique that is handy is to add a role of Business Change Manager to your project team whose responsibility is to ensure benefits realization.  But before the role is added it is important to use a benefits realization diagram to map out all the benefits.  This diagram should provide the input needed to determine business areas impacted leading to the selection of business change manager(s).

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    #63697

    John J. McDonough
    Participant

    This change manager sounds like a very good idea.
    Another thing that can work well, but generally requires corporate buy-in, is to require the requesting manager to commit to the savings in order to get the project authorized in the first place.  In at least one company of which I am aware, the committed savings are deleted from next year’s budget, so the requesting manager has a lot of pressure to ensure that the savings are realized.
    –McD
     

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Viewing 5 posts - 1 through 5 (of 5 total)

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