July 16, 2014, 8:29 PM —
I had the great pleasure of speaking with Jim Maholic, a VP in Hitachi Consulting’s Management Consulting and Industries Practice. We discussed how to identify, calculate and communicate the value of large scale IT projects, based on Jim’s book “Business Cases that Mean Business”.
He said he wrote the book as a way of benefitting others by sharing his insights and experience on how to communicate the business value of proposed projects in a way that senior business leadership is more likely to approve its funding.
His first piece of advice for IT executives, IT managers, and Project Managers seeking approval and funding for a large project is that senior executives only fund projects for four reasons. To obtain approval, IT proposals must align to core business drivers and show that they:
• Enhance revenue
• Reduce cost
• Optimize assets
• Minimize risk
Furthermore, as senior executives are deciding what project to fund, it can’t just be the best IT project; it must be the best business project. When looking for project funding, IT people must understand they are not just competing against other IT related projects. They are competing against all project types that consume the company’s money, time, and other resources. For example, if the company has $1 million to spend on a project, it will compare your new “Accounting System Replacement” project against building a new warehouse in a new up-and-coming sales district. Therefore, you must present your project in terms of its overall business and financial benefits, such as Return On Investment, not on IT related technologies alone.
Mr. Maholic went on to say that before pitching your project to senior management, you should do your homework and assure it includes the following items:
• Understand how your company compares to other companies in your industry as it relates to your project. For example, if your project proposes to improve the inventory throughput, present data showing how your company performs against its peers in inventory turnover.
• Dot your “I”s and cross your “T”s. That is to say, don’t try to be clever, senior executives will see through it. Anticipate being asked the questions that you don’t want them to ask.
• Gather and analyze as much data about the potential business benefits of your proposed project as possible. It will not only better prepare you for your presentation, it will give you a better understanding of what needs to be done. These types of needed analysis and desired benefits are thoroughly discussed within his book.