How to Accurately Determine an IT Project's Value
You have an idea for a great new IT project, but will it be worth the cost? Here's how to find out.
An IT project that fails to deliver value beyond its cost is a waste of time, money, and team resources. That's why it's important to estimate a project's probable return at its very start.
The most effective way to gauge an IT project's value lies in a comprehensive assessment that goes beyond financial metrics, says Robert H. Fortenberry, CTO at IT consulting firm York Solutions, in an email interview. "Rather than solely focusing on immediate returns, it's crucial to consider the project's long-term strategic alignment with enterprise goals," he notes.
The assessment should evaluate key factors, such as anticipated revenue growth, market expansion opportunities, competitive advantage, and potential cost savings. "By taking a view encompassing both quantitative and qualitative aspects, organizations can make more informed decisions about which projects truly offer the highest value proposition," Fortenberry says.
Building a Framework
Enterprises should build an agreed upon value realization framework prior to the project's start, says Shriram Natarajan, director with technology research and advisory firm ISG, via email. Such a framework should be designed to provide business value realization throughout the project's course. It also keeps enterprise leaders apprised of ongoing progress (or lack thereof). "Project leaders should have expectations mapped to the realization framework and the relative weights of benefits scored," Natarajan says. "The value realization formula should be consistently applied across the [project] lifecycle and actively used for decision support."