An IT project justification consists of three parts:  The strategic business case (qualitative)  The ROI analysis (quantitative)  The post project audit (accountability).

 The strategic business case is the most important component  The strategic business case component is derived from the IT Alignment strategy  Answers the question: “What strategic business goal will not get done, or will be hampered, by not successfully completing this IT project?”  This component of the IT Project justification tends to be more qualitative than quantitative  This component carries more weight with just about everyone of the CXO’s other than the CFO.

 For Project #1 homework, do the best you can at showing ◦ What strategic business initiative(s) in your company need this IT project ◦ How it (they) will be facilitated by this IT project ◦ How it (they) will be hampered by not successfully completing this IT project.

 The costs and the tangible benefits are the easy part  The intangibles are the hard part ◦ Over optimistic intangible estimates damage your credibility and your ability to do the CIO’s job ◦ Too conservative estimates may result in a valuable project not being funded ◦ Remember: The dollar valuation of the intangibles MUST NOT be perceived to be an “I.T. number”  Secret to credible effective intangible estimating: get the other CXO’s to weigh in and then let the CFO assign the final intangible numbers to the project ◦ Takes a lot of coordination and communication (but this is good for your career and the future effectiveness of IT) ◦ Takes more time ◦ Keeps your neck out of the noose.

 Don’t get too detailed  This is only a rough estimate (it can’t be more than that)  Not done for smaller projects, you must decide where the threshold is  DO NOT rely on ROI analysis alone to make resource allocation and prioritization decisions—the business case will likely carry more weight.

 Answers the two questions: ◦ “Did the IT Project accomplish what it was intended to do?” ◦ “How can we do a better job of estimating benefit next time?”  Planning for post project audit: ◦ use ROI calculations to generate metrics that will be used in one year to measure success ◦ How will you measure the impact on strategic business initiatives ◦ BEFORE the project goes up for funding approval, you must assign specifically: WHO will take WHAT measurements HOW and WHEN and to WHOM will these be reported  Sometimes, this pre-planning for post project audit will change focus, priority and approach for the IT project! (For class discussion: Why?)

 What are the three components of an IT Project Justification and why are all three important?  What are the political parts of an IT Project Justification and how will you do these in your company?  What happens if you skip the Post Project Audit planning?  What if you did all this work for a large IT Project and it didn’t get approved? Was this all a waste of time?