Blog Archives

Balanced Scorecards and the IT Business Case

Writing an effective business case for IT investments is easier in an organization with a strong culture of measurement, and even more so in an organization that has embraced the balanced scorecard (BSC) methodology as introduced by Robert Kaplan and

Posted in Balanced Scorecard, Project Selection

IT Investment: Making a Business Case (A Book Review)

In general, I found this book disappointing. Dan Remenyi does a good job of explaining the importance of business cases and the elements that should get included within a business case, but he falls short on the harder task of

Posted in Book Review, Business Case Analysis, Project Selection

Review of Making Technology Investments Profitable

In their book Making Technology Investments Profitable: ROI Road Map to Better Business Cases, Jack M. Keen and Bonnie Digrius make the case for business cases, walk through the process of creating a business case, provide insights for finding and

Posted in Book Review, Business Case Analysis, Project Selection, ROI

The Five Reasons IT Should Care about Business Cases

Why should IT care about business cases? Aren’t business cases more of interest to finance? In reality, business cases are critical to the success of IT. And here are five reasons why. Make Projects Succeed The business case is critical not just for

Posted in Business Case Analysis, Project Selection

Modified Internal Rate of Return (MIRR), a More Meaningful Metric than IRR

Following my last post on the flaws of IRR—resulting from the unrealistic assumption that cash inflows get reinvested in projects with identical IRRs, I decided to investigate a formula with which I had not been very familiar, the modified internal

Posted in IRR, Project Selection

Internal Rate of Return (IRR): Clever but Misleading

As I had initially conceived (or misconceived) this series of posts on project selection measurements, this post on Internal Rate of Return (IRR) was to represent a climax, during which I’d describe the cleverness of IRR as a selection criteria.

Posted in IRR, Project Selection

Break-Even Analysis

Like the formula for Net Present Value (NPV) explored in an earlier post, break-even analysis is based on a time series of cash inflows and outflows. It is simply the time required for the discounted cash inflows to equal the

Posted in Break-Even Analysis, Business Case Analysis, NPV, Project Selection, ROI

Let’s Consider Time: Net Present Value (NPV)

As I mentioned in my prior post, the traditional ROI formula does not consider time. But in weighing the costs and benefits of a project, we must take into account the fact that neither costs nor benefits materialize instantaneously, each

Posted in Business Case Analysis, NPV, Project Selection, ROI

The Formula for ROI, Just a Little too Simple

Recently, I reviewed a book on calculating ROI, but today I’d like to call into question this iconic phrase. The formula for calculating Return on Investment (ROI) could hardly be simpler. Just subtract the cost from the gain and divide

Posted in Business Case Analysis, Project Selection, ROI

Calculating ROI: A Review of Show Me the Money

I hear the term ROI often enough but rarely see it calculated. It is said that business is all about numbers– financial statements, stock prices, bonus plans–but then there are IT projects, with budgets that are clear enough (or at

Posted in Book Review, ROI