I.T.-Business Alignment: 10 Best Practices - ' Know How ' (
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(And When) To Do a Business Case">
3. Know How (And When) To Do a Business Case
It has become so fashionable to talk about the business justification for technology expenditures that some CFOs expect an ROI calculation to come clipped to every proposal. That's madness, says Chris Curran, chief technology officer of Diamond Management & Technology Consultants.
"There are some things you have to do because if you don't, something's going to break," Curran says. You still measure the success of these undertakings, which Curran calls "stay-in-business investments." But you do that by seeing if you achieved your milestones, stayed within budget and met your schedule.
For Curran's clients—most of them with revenue above $1 billion—there's no need to create a business case for I.T. investments of less than $500,000. And even some larger projects, in the $1 million range, can defy a business-case calculation if their benefits are unclear. Indeed, in many cases, a $1 million project itself may be the thing that creates clarity about expanding a project—or shelving it.
A common mistake is failing to track benefits after a project is up and running. "Very few companies actually do a regular practical follow-up once the investment has been made," Curran says. "You'll never do better business cases if you don't know how your initial thinking was right or wrong."
Next Best Practice: Measure the Right Things
