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Subject: IT Decision-Making
Tutorial: The IT Investment Management Approach ("Approach")
How the Approach Works - Control Phase
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Subject: IT Decision-Making
Tutorial: The IT Investment Management Approach ("Approach")
Actual Performance is Monitored and Compared to Plans
Key data have been systematically gathered from many sources and incorporated into a performance measurement system; each indicator is updated periodically (typically monthly).
Let's peer three months into the future and see what the indicators might look like and the kinds of data they might reflect at the end of March.
ORGANIZATION
PERFORMANCE MEASUREMENT SYSTEM |
||||
| Key Indicators | Whizbang Project | No. 1234 | ||
| A. Budget Performance | Project Budget |
Budget Plan |
Budget Actual |
Variance |
Plan vs. Actual |
$500,000 |
$150,000 |
$151,000 |
$1,000 |
| B. Operational Performance | Project |
Milestone Plan |
Milestones |
Variance |
| No. of Milestones Planned vs. No. Achieved |
5 |
2 |
2 |
-0- |
Since the two key indicators for the Whizbang project reveal no significant variances, i.e., budget performance is within acceptable variance thresholds and the operational performance is reported as on-target, no further analysis of the Whizbang project is warranted at this time.
Suppose that the project team had encountered significant problems; the report might look like this instead:
ORGANIZATION
PERFORMANCE MEASUREMENT SYSTEM |
||||
| Key Indicators | Whizbang Project | No. 1234 | ||
| A. Budget Performance | Project Budget |
Budget Plan |
Budget Actual |
Variance |
Plan vs. Actual |
$500,000 |
$150,000 |
$247,000 |
$97,000 |
| B. Operational Performance | Project |
Milestone Plan |
Milestones |
Variance |
| No. of Milestones Planned vs. No. Achieved |
5 |
2 |
0 |
2 |
This data indicates a potentially serious problem. The performance indicators show a significant deviation from the condition that IT project planners told senior management they should expect at this point in time. The project has:
- materially exceeded the budget plan, and
- failed to achieve any of milestones established by the project plan
Once potential problems are isolated, this period’s monitoring activity is complete; the next step is analysis.
Go to the next page for the Analysis step.
IT Investment Management Approach, Lesson 16 of 21
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