IT Investment: Making a Business Case
Shows how to present an IT project s expenses in terms of an investment in business practices and processes.
TABLE OF CONTENTS IT Investment: Making a Business Case
Chapter 1: Why a business case for IT investment?
Our lives teem with numbers, but we sometimes forget that numbers are only tools. They have no soul; they may indeed become fetishes. Many of our most critical decisions are made by computers, contraptions that devour numbers like voracious monsters and insist on being nourished with ever-greater quantities of digits to crunch, digest, and spew back.
P Bernstein, Against the Gods, (1996, p.7)
The difficulty lies, not in the new ideas, but in escaping from the old ones.
J. M. Keynes, The general Theory of Employment, Interest and Money, (1964)
1.1 Introduction
A new approach to developing a business case for IT investment which will directly help the organisation produce improved results, is long overdue.
Historically, organisations have frequently not bothered to produce a business case or if they have, they have tended to cobble together some financial figures based on a combination of historical records and/or semi-valid assumptions and estimates. Sometimes organisations have produced so-called cost-benefit analysis or even feasibility studies in the form of rather simplistic financial generalisations that have not looked carefully at the business issues involved with or behind the actual IT investment. On the other hand these cost-benefit analysis or feasibility studies have sometimes led to confusion and redundant effort which was clearly demonstrated by Drucker when he said:
We have known for a long time that there is no one right way to analyse a proposed capital investment. To understand it we need at least six analyses: the expected rate of...
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