IT Return on Investment (ROI): A Practical Guide for Business Users – Part Three

Part Three: Enterprise Architecture and Context

Current business process
The context of an IT project is determined within the current business process(es) that will be impacted and improved by the investment. An analysis will reveal business process costs and possible benefits that changes to the process may illicit. An example of a business process cost is the documentation or mapping of the existing process.  If the current process is complex, it will likely include multiple departments or divisions, and the mapping process may involve many individuals. What then would be an example of a business process benefit? Consider a scenario in which a manual conversion process of a native file to one or more web viewable formats is automated.  The manual task is no longer required post implementation, so the benefits are time savings and improved efficiency.

The business
Understanding the costs and benefits in the context of the organization is equally important. An example of a business cost is the current employee on-boarding process at many companies.  Job candidates fill out multiple documents and forms which are manually filed by Human Resources (HR). A business benefit is easily created by establishing automated routing of an electronic HR form from a job candidate to the Human Resources Assistant and then to the Manager of Human Resources.

External resources
Lastly, a familiarity with the costs and benefits of external constituencies is needed. A general example of an external cost is a taxonomy expert who is contracted to provide an add-on software product to your solution or consulting services billed at an hourly charge rate structure. A relevant example of an external resource benefit is the automated routing of documents that need to be translated.  Instead of physically shipping the English version of a marketing flyer to a chosen translation provider, the new delivery mechanism becomes a secure extranet website with a link to the most current version of the English document.

Another example is a procurement website developed by one company intended to be used by its vendors. An improvement in the time required to make Purchase Orders available may be realized, but don’t forget about the initial training costs required to educate users on the new system or capability.

See Part Two here

See Part One here

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One Response to “IT Return on Investment (ROI): A Practical Guide for Business Users – Part Three”

  1. Sherron Frenzel Says:

    Thats wonderful stuff you got in here. Had been hunting for articles on this everywhere. good blog

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