Understand framework of scope and strategic objective to classify IT projects based on risk
Understanding the scope and strategic objectives of an IT project is essential for any business contemplating to invest in new technology. They also provide a company with knowledge about classifying IT investment projects based on the risks involved.
The IT department must closely link its project to the objectives outlined by the organization. The understanding of the framework of a particular technology involves comprehending the structure of the existing infrastructure and the solution desired from upgrading the systems.
On the other hand, strategic objectives may include investing in technology to re-solve problems, ensure short-term gains, and sustain the future growth of the business. However, to effectively address the two dimensions, different types of investment patterns must be followed.
These investment patterns include transformation, renewal, process improvement, and experimental investments. Transformational investment has the highest risk because it occurs when the company is shift into a new IT system.
The company’s core values and objectives may prohibit the development of critical structures needed for future success. Renewal investment is less risky compared to transformational ventures.
This investment focuses on the maintenance and upgrading of the existing IT platforms. It includes activities such as maintenance and support.
On the other hand, process improvement involves the use of business application to leverage a company’s infrastructure and ensure it provides short-term profitability. This is a low risk investment because they focus on improving the existing infrastructure.
Finally, there is the experimental initiative. This is an investment focused on experimenting with new technologies as the company decides or weighs its options on which project to adopt.
What are the kinds of benefits that can be used to justify an IT project?
Apart from the objectives of the business, the overall benefits of the organization can be used to justify an IT project. In using benefits to justify IT projects, the advantages offered by the project are observed based on two perspectives.
This is the business change that brings about positive influences and the degree of explicitness of the business. Basing on these criteria, the organization’s management may determine the viability of the benefits. These advantages must have a financial leverage.
The article indicates that there are four factors that can be used to justify an IT project. They include financial, quantifiable, observable, and measurable advantages. However, these benefits must be observed in relation to their viability through a structured framework.
Financial aspects can be calculated by assigning a price or cost to a quantifiable feature. Quantifiable benefits are forecast that can be realized from changes made to the organization.
Observable features are estimated through opinion or judgment. Consequently, measurable benefits are realized through already established methods of assessment.
How do you justify upgrading from an old technology?
The upgrading of IT infrastructure from a previous system does not only provide efficiency, but also provides customer satisfaction which is something vital for the survival of the organization.
The improvement of the systems allows the company to interact with other companies, it also helps organizations to partner and enter into new market environments. Furthermore, possessing modern technology ensures that the system can be serviced in case of a technical breakdown.
Zara needs to upgrade the point of sale (POS) systems from DOS to the new Windows OS, so as to enjoy the new features in the software.
By using the Windows Software, the expanding company will be assured that their systems are protected and in case of failure, then Microsoft will be able to service them. Moreover, the upgrading will offer more opportunities for the company.
In this respect, by using Windows the company will reduce the inefficiencies brought about by DOS. Challenges such as low speed and small screens and other complaints attributed to the PDAs will be eradicated.
The company will have modern terminals with new PCs, which will enhance the IT department’s capability to accommodate sophisticated communications such as establishing direct networks within the company.
The adoption of new technology will allow the company to use wireless networks. This will reduce costs and create efficiency because floppy disks will no longer be needed to store and transport information and sales data.