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Understanding ROI Just
Enough to Get (or Keep)
Your Project Funded
Heather Kotula
VP, Marketing and Communications
hkotula...
 Poor project planning
 A weak business case
 Ineffective or insufficient management
support
Why Do Projects Fail?
 Benefits of the proposed change
 Communicating those benefits
Understanding is the beginning of approving.
André Gide
B...
 Business problem or opportunity
 Benefits
 Risk
 Costs
 Likely technical solutions
 Timescale
 Impact on operation...
 What is your goal?
 What’s stopping you from reaching the goal?
 How much change is needed to overcome the
problem?
 ...
 Brief and convey only the bare essentials
 Interesting, clear and concise
 Free of conjecture
 Light on jargon and bu...
 Executive Summary
 Introduction
 Analysis
 Conclusion
Major Sections
Brief and concise
Remember
 Measure To Manage
 Measure what's important
 Publish your metrics and benchmarks
 Reward people for exceeding their g...
 Metrics are used to track all areas of business
 KPIs – Key Performance Indicators – are used
to target and track criti...
Metrics Matter
Metrics are a concrete way of defining what a
[knowledge management or content
management] project will ach...
What Should Metrics Include?
 Targets to be set
 Success to be assessed
 ROI to be estimated
 Ongoing viability to be ...
Make Metrics Good
The most powerful metrics are those that directly
measure the desired business outcomes.
Expressing Metrics
DO SAY
 Improve the rate of
product cross-selling
by front-line staff
 Improve the average
number of ...
 Operating Productivity
 Hours Worked Per Process
 Return on Investment
What Kind of Metrics?
Review Cycle
What is ROI?
For example
 Original cost of investment is $50
 Increased sales is $200
 ROI is 3 times the original cost
ROI, Traditionally Speaking
 Calculated retrospectively
 From existing accounting records, which provides
for transparen...
Traditional Cost Components of ROI
 Infrastructure – software, hardware, hosting
 Labor – Salaries for internal personne...
Traditional Returns Components of ROI
 Cost savings
 Cost avoidance
 Increased revenue
 Revenue enhancement
 Revenue ...
 Required investment
 Payback period
 Estimates
 Assumptions
 Project risk (probability of success or failure)
What Y...
 Alignment of an initiative with business
strategy
 Interdependence of projects and systems
from an overarching view
 E...
…ROI is designed to assess
profitability or financial efficiency
…and therefore has limitations.
And…
…in order to calculate an ROI–like measure for
information infrastructure investments, we have to
address intangible benef...
 Costs of upsetting customers
 Costs of failure due to inappropriate system or
faulty implementation
 Incompatibility w...
 Costs of losing staff morale
 Costs of losing a competitive edge
 Costs of declining company image
 Loss of investmen...
 Better information
 more timely information
 more accurate information
 faster access to data
 uniform information (...
 Better use of information
 strategic and organizational planning
 resource control
 asset deployment
 flexibility an...
 Increased productivity
 Time savings
 Happier staff
 Increased job satisfaction
 Happier customers
 Improved findab...
How do you quantify intangible
costs and benefits?
 Total Economic Impact (TEI) from Forrester
Research Inc.
 Business Value of IT (ITBV) program developed by
Intel Corpor...
 Methodology developed by Forrester
Research, Inc.
 “When discussing the project, use this entire
sentence to reinforce ...
“We will be doing ______ to
make ________ better, as
measured by _______, which
is worth ________.”
TEI - Forrester Resear...
“We will be doing [THIS PROJECT OR
ACTIVITY] to make [PAIN POINT] better,
as measured by [METRIC(S)], which is
worth [ESTI...
 User productivity, as measured by increased
capacity
 Program effectiveness toward market growth
 Organizational effic...
 Developed in 2002 at Intel Corporation
 Business Value Dials (Indicators)
Business Value of IT (ITBV)
 Exploration
 Planning
 Development
 Deployment
Business Value of IT (ITBV)
Intel Corporation
 Connect
 Ingoing communications and reporting
 Report back at the close of the project
“A Business Case For Taxonomy”
What is the value of…
What is the value of…
“Change what you think and say before you
change anything else, and focus your comments
always on business outcomes.”
Rich...
“Show the value of IT as an investment in business
performance.”RichardHunter
Show Off
What’s the Final Answer?
A. I can use Google to find the answer
B. My biggest competitor has the answer
C. My organization...
Questions?
Heather Kotula
hkotula@accessinn.com
505-998-0800 x123
Thank You
DHUG 2017 - Understanding ROI Just Enough to Get Your Project Funded
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DHUG 2017 - Understanding ROI Just Enough to Get Your Project Funded

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Essential tips for information workers to prove the return on investment (ROI) to achieve or maintain funding on your data projects.

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DHUG 2017 - Understanding ROI Just Enough to Get Your Project Funded

  1. 1. Understanding ROI Just Enough to Get (or Keep) Your Project Funded Heather Kotula VP, Marketing and Communications hkotula@accessinn.com 505-998-0800 x123
  2. 2.  Poor project planning  A weak business case  Ineffective or insufficient management support Why Do Projects Fail?
  3. 3.  Benefits of the proposed change  Communicating those benefits Understanding is the beginning of approving. André Gide Building a Business Case: First Things First
  4. 4.  Business problem or opportunity  Benefits  Risk  Costs  Likely technical solutions  Timescale  Impact on operations  Organizational capability Assess This
  5. 5.  What is your goal?  What’s stopping you from reaching the goal?  How much change is needed to overcome the problem?  Are you certain this will solve the problem? Ask Yourself
  6. 6.  Brief and convey only the bare essentials  Interesting, clear and concise  Free of conjecture  Light on jargon and buzzwords  Your vision of the future  Clear about the value and benefits  Consistent and easy to read Your Business Case Should Be
  7. 7.  Executive Summary  Introduction  Analysis  Conclusion Major Sections
  8. 8. Brief and concise Remember
  9. 9.  Measure To Manage  Measure what's important  Publish your metrics and benchmarks  Reward people for exceeding their goals  And then keep tuning the metrics The Ol’ Business Adage
  10. 10.  Metrics are used to track all areas of business  KPIs – Key Performance Indicators – are used to target and track critical areas of performance Metrics vs. KPIs
  11. 11. Metrics Matter Metrics are a concrete way of defining what a [knowledge management or content management] project will achieve, and whether it met those goals. James Robertson, StepTwo
  12. 12. What Should Metrics Include?  Targets to be set  Success to be assessed  ROI to be estimated  Ongoing viability to be tracked  Lessons to be learned in the process
  13. 13. Make Metrics Good The most powerful metrics are those that directly measure the desired business outcomes.
  14. 14. Expressing Metrics DO SAY  Improve the rate of product cross-selling by front-line staff  Improve the average number of intranet hits to 30,000 per day by June DON’T SAY  Deliver information more effectively  Improve intranet usage by staff
  15. 15.  Operating Productivity  Hours Worked Per Process  Return on Investment What Kind of Metrics?
  16. 16. Review Cycle
  17. 17. What is ROI?
  18. 18. For example  Original cost of investment is $50  Increased sales is $200  ROI is 3 times the original cost
  19. 19. ROI, Traditionally Speaking  Calculated retrospectively  From existing accounting records, which provides for transparency of the numbers  Real money – money invested and money returned from the investment
  20. 20. Traditional Cost Components of ROI  Infrastructure – software, hardware, hosting  Labor – Salaries for internal personnel, Consultant Fees  Training – internal personnel training by third parties, end-user training
  21. 21. Traditional Returns Components of ROI  Cost savings  Cost avoidance  Increased revenue  Revenue enhancement  Revenue protection
  22. 22.  Required investment  Payback period  Estimates  Assumptions  Project risk (probability of success or failure) What You Should Quantify
  23. 23.  Alignment of an initiative with business strategy  Interdependence of projects and systems from an overarching view  Effectiveness of the system (qualitative measure of its “goodness”)  Efficiency of the system (what it does per dollar invested) ROI usually fails to address:
  24. 24. …ROI is designed to assess profitability or financial efficiency …and therefore has limitations. And…
  25. 25. …in order to calculate an ROI–like measure for information infrastructure investments, we have to address intangible benefits. Therefore…
  26. 26.  Costs of upsetting customers  Costs of failure due to inappropriate system or faulty implementation  Incompatibility with other systems leading to unexpected costs of software amendments, tailoring, and maintenance  Costs of errors due to lack of experience in using new system Intangible Costs Might Include:
  27. 27.  Costs of losing staff morale  Costs of losing a competitive edge  Costs of declining company image  Loss of investment in prior or legacy systems  Temporary drop in productivity during the change Intangible Costs Might Include:
  28. 28.  Better information  more timely information  more accurate information  faster access to data  uniform information (well-formed data) Intangible Benefits Can Include:
  29. 29.  Better use of information  strategic and organizational planning  resource control  asset deployment  flexibility and transparency Intangible Benefits Can Include:
  30. 30.  Increased productivity  Time savings  Happier staff  Increased job satisfaction  Happier customers  Improved findability and discovery  Better corporate image Intangible Benefits Can Include:
  31. 31. How do you quantify intangible costs and benefits?
  32. 32.  Total Economic Impact (TEI) from Forrester Research Inc.  Business Value of IT (ITBV) program developed by Intel Corporation Other Metrics For Measuring Value
  33. 33.  Methodology developed by Forrester Research, Inc.  “When discussing the project, use this entire sentence to reinforce the project and its value.” ChipGliedman Total Economic Impact (TEI)
  34. 34. “We will be doing ______ to make ________ better, as measured by _______, which is worth ________.” TEI - Forrester Research Inc.
  35. 35. “We will be doing [THIS PROJECT OR ACTIVITY] to make [PAIN POINT] better, as measured by [METRIC(S)], which is worth [ESTIMATED PAYBACK].” TEI - Forrester Research Inc.
  36. 36.  User productivity, as measured by increased capacity  Program effectiveness toward market growth  Organizational efficiency  Customer satisfaction, in terms of additional sales to current customers or decreases in account turnover Quantifying Benefits with TEI
  37. 37.  Developed in 2002 at Intel Corporation  Business Value Dials (Indicators) Business Value of IT (ITBV)
  38. 38.  Exploration  Planning  Development  Deployment Business Value of IT (ITBV) Intel Corporation
  39. 39.  Connect  Ingoing communications and reporting  Report back at the close of the project “A Business Case For Taxonomy”
  40. 40. What is the value of…
  41. 41. What is the value of…
  42. 42. “Change what you think and say before you change anything else, and focus your comments always on business outcomes.” RichardHunter Change Happens
  43. 43. “Show the value of IT as an investment in business performance.”RichardHunter Show Off
  44. 44. What’s the Final Answer? A. I can use Google to find the answer B. My biggest competitor has the answer C. My organization has a unique answer D. Jabin has the answer but he won’t tell me
  45. 45. Questions?
  46. 46. Heather Kotula hkotula@accessinn.com 505-998-0800 x123 Thank You

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