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Subject: IT Decision-Making

Tutorial: The IT Investment Management Approach ("Approach")


Adoption of the Approach - Factors to Consider

Organizations that adopt the IT Investment Management Approach, in whole or in part, can reap material benefits; however, it is important to recognize that there are material factors that can affect the success of the improvement effort.

Five key factors that can spell success or failure are:

1. Top management commitment and ongoing involvement

  • Commitment and involvement requires that senior management: communicate their support of the Approach; share their strategic vision with the CIO; assure that all parties adhere to the process; and, actually use the information to make IT investment decisions

2. The CIO and IT organization must be willing to make changes

  • Change means they must: learn, understand, and speak the language of business (e.g., writing coherent budget justifications that senior management can understand); accept that performance will be measured and monitored; adopt disciplined approaches to project / and activity planning and cost estimates

3. Processes must be redesigned, new tools and techniques are needed

  • An analytic framework requires: processes that are efficient and effective (e.g., the budget process), linkages among the processes, systems that are designed for performance measurement, and practical planning and analysis techniques, to name a few

4. Accepting the view that IT is an investment and not an expense

  • IT is not treated simply as an expense (e.g., paper and freight); IT can offer long-term benefits - it also involves long-term costs . IT decisions should weigh both. See the Brief "IT - An Expense or an Investment".

5. Full realization of the Approach’s benefits will take time

  • The breadth and depth of changes can require years to fully implement; however, carefully planned and implemented incremental improvements can result in significant benefits in the short-, medium-, and long-term.

Go to the next page for the Conclusion.

IT Investment Management Approach, Lesson 21 of 21

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