Today’s organizations must evaluate hundreds or even thousands of potential projects each year to determine which initiatives are worthy of funding. They must have a laser focus on the projects that will contribute the most value in growing or transforming the business.
But how do you objectively determine which projects will contribute the most to your company’s bottom line? This contribution can be measured based on revenue growth, cost savings or cost avoidance, or, if the stars align, all three!
Automating the typically manual spreadsheet-driven process of justifying strategic investments is the key to providing an objective framework for timely decisions. This is the single step organizations can execute to drive the most outsized impact in terms of acuity and velocity in the funding process. Automation provides the foundation for institutionalizing digital transformation initiatives and standardizing the Business Case discipline. It wrings ambiguity and subjectivity from the process, providing a platform for a high-fidelity governance model with decision-grade data for traceability and accountability.
All discretionary projects must be evaluated based on a number of factors including financial performance (Return on Investment, Payback Period, Internal Rate of Return, Net Present Value, etc.), alignment to corporate strategy, the ability to execute the project, and overall risk. As costs and benefits are collected and refined through the development of a Business Case, the individual project initiatives must then compete with other proposed initiatives for finite corporate resources including funding, IT assets, and project personnel.
How do you ensure that your project Business Cases are being objectively evaluated and selected as compared to other proposed initiatives within the organization?
Have you ever had what you thought was the greatest idea in the world, developed and submitted a business plan, but ultimately the project was not approved?
Was it objectively evaluated or did someone else in the organization have more political influence to get his or her project approved, even though the value and return of that project may have been less than your project?
If you have experienced any of the above, you are not alone!
These are questions that many organizations are grappling with as their team members compete for the support required for project success. Automation captures the standardization and drives the velocity required to help ensure high-impact initiatives aligned with corporate strategies receive commensurate financial and management support.
Are you stuck in a downward spiral trying to evaluate projects using disparate tools and spreadsheets?
Are you sure that the ROI being calculated in one spreadsheet uses the same ROI calculations as the other project spreadsheets being compared?
Are the submitted Business Cases basing their financial justifications on increased revenues or cost avoidance?
Are you using SharePoint to aggregate and score these projects?
By institutionalizing a standard method for submitting, evaluating and approving Business Cases, you can avoid some of these pitfalls. Inherent problems with a manual process impede clarity and hamper results. Automation institutionalizes standard methods for assembling business cases and delivers high-reliability governance through the full investment lifecycle.
Purpose-built strategic investment platforms provide the means to implement a model that captures best practices for your industry and your organization. This standardization and automation levels the playing field and provides an objective methodology on which to base your critical project investment decisions.
With mastery of these core competencies, strategic investment platforms can be used to deliver actionable analytics, such as portfolio management capabilities, to determine the optimal combination of projects to commission based on any number of criteria. In addition, technology platforms also enable the continuous planning required for ongoing assessment of new Business Cases and projects in-flight throughout the year.
By standardizing and automating your Business Case management process, you can implement an effective evaluation methodology with accurate and consistent calculations. This will ensure you are choosing the right revenue-generating or cost reduction projects to undertake based on objective data rather than selecting projects put forth by those with the loudest voices in the room.