There is a reason why over 50% of strategic initiatives presented to executive committees are not approved.
The reason is because they are heavily focused on costs and outcomes from a technology perspective. Often the concerns are straightforward. Did IT deliver on time and on budget? This is a righteous focus. However, an effective investment governance framework needs to broaden its perspective to define and measure the business outcomes enabled by the initiative.
After all, often it is these outcomes that provide the driving force behind why an investment is approved in the first place.
A digital business case management solution like Inpensa provides a collaborative environment for framing an initiative that integrates business owner, technology, and finance perspectives. This helps ensure investments are robustly defined, strategically aligned, and thoroughly assessed.
It is critical to robustly define your investments so that costs and outcomes are clear and well understood. A best practice business case and investment governance process must focus on business outcomes that extend beyond IT delivery performance.
These benefits must be defined up front in the business case process in a framework that drives ongoing objective tracking of benefits realized compared to benefits contemplated at time of initiative approval. A digital business case management platform has the capability to capture your company’s taxonomy to ensure consistent characterization of benefits across business cases and tracking using real-time data.
Business outcomes should align with strategic objectives. It is challenging for many organizations to validate alignment in a systematic manner. A digital business case management platform provides a framework to understand how strategic initiatives and associated business outcomes support execution against strategic objectives.
Financial benefits include elements such as revenue, cost savings and cost avoidance. Other measurable business outcomes can be just as important.
These range from headcount reduction/redeployment, to increases in new account capture, faster time to revenue from new customers, and increased system throughput, to name just a few. It is also vital for investments to be assessed thoroughly in terms of strategic value and likelihood of success. Capturing financial benefits and objective non-financial metrics helps drive long-term successful investments.
Incorporating business outcomes—financial and operational metrics—into business cases up front and measuring results in real time is key to optimizing impact of capital deployed for strategic initiatives.
This is fundamental to tying initiatives to operating results, extending beyond the customary focus on IT delivery.
Whatever the metric, it is important that it be defined at the outset of business case creation, with an appropriate governance process to review and approve metrics and definitions.
A robust digital investment governance platform like Inpensa’s incorporates these capabilities and extends benefits definition to benefits tracking during the project set-up stage and, importantly, to the value period beyond project set-up, with a corresponding governance model to ensure business owners and finance managers can track and certify all measurable outcomes.