Business Value Consulting
Proving the economic relevance of and justifying investments is a common practice in all business divisions. In most cases, models are available to conduct a so-called investment analysis. For ICT investments, the situation is different. In the past, ICT has often been regarded a cost center and a necessity, which was not really put to test or into question. While in the boom years the IT organization became a "strategic" issue, and high investments were made without a prior evaluation or later analysis of the real value and benefits of IT investments, economic difficulties have forced companies to significantly increase cost pressures, also within IT.
In view of very intense cost discussions and general budget cuts, justifying IT investments has become a priority. Many IT executives are faced with questions such as the following:
- "It is a management mandate to save 10% of cost in each area - how can I achieve this?"
- "The controlling department requests me to calculate the economic efficiency of ICT projects and prove it afterwards - which methodologies are available to help me do this?"
- "While it is relatively easy to quantify the cost, it is much more difficult to quantify the value in € – which options are available?"
- "Often, IT vendors have very nice case studies at hand – however, these case studies have not much to do with my concrete situation."
- "I need models and methodologies that can be implemented and used fast and will stand up to the auditors - are such tools available in the market?"
Are these the questions to be answered by yourself or your customers? We have been researching these issues for years and would be happy to share our knowledge with you! In our opinion, there is a clear demand for ICT business value analyses, which is, however, not addressed sufficiently. Cooperation with vendors and users is of major importance. Unlike the situation in the late 90ies, "hard facts" and compelling argumentation when planning necessary IT projects are needed. The following figure illustrates the optimal interaction and cooperation:
A special focus should be on the collaboration between the various lines of business (LoBs), since ultimately, they will have to justify and account for the 'value' of most ICT projects.
Experton Group is committed to support both ICT users and vendors to address the business value analysis issue. We are happy to answer your questions anytime. Just send an e-mail or give us a call!