In financial planning, there six steps you can take to solve the mystery surrounding information technology projects – how to assess and prioritize for an excellent return on your investment.
In all likelihood, you’re limited in resources, and you risk inaccurate measurements and inept information flow. This can lead to erroneous analysis.
Several conflicting aspects to consider are the multiple risks to the overall organization. Just one initiative can adversely eat up many of your valuable resources in people, time and technologies.
So your proclivities in decision making are important – consider the big picture view in launching IT projects because you need a complete balance sheet of data. Fortunately, it involves a fairly simple process.
Here are six steps:
1. Start generating a consensus
Your entire leadership team should participate in strategic planning – get input from everyone to fully understand and agree in view of your company’s mission and goals.
Depending on the size of your organization, multiple planning meetings might be required. Details are important for everyone to weigh to develop an action plan in making sure your company vision is achieved.
2. Recognize your project drivers
Your project drivers can help you boost your business by increasing profits, improving efficiency, overcoming barriers, minimize threats, and eliminate problems.
Determine which drivers provide value:
Growth opportunities, competitive benefits, quality enhancements, cutting of costs, financial gains, minimizing risks, process improvements, reduce tax liabilities, eliminate legal issues, or improve your prospects legislatively.
3. Calculate the comparative worth of projects
Evaluate the effects on your anticipated results in terms of strategic value. But the projects must be assessed in comparison to priorities.
For example, if you forecast an intimidating tax liability and cash flow is weak, such a project might take more priority over other projects.
4. Get agreement on aspects that influence the success of a project
Factors most likely include available money, time and people. They’re either advantageous or disadvantageous.
Some factors might be beyond your control.
This will help prioritize projects. On one or more projects you will proceed. Others will be tabled.
5. Develop a template that will help you evaluate and prioritize
After you consider the previous four steps, a template or matrix is in order. That means using a weighted scale to evaluate the priority of your ideas.
Your matrix doesn’t have to be complicated. It can be coded in colors or numbers.
For example, the number 10 can be used to label the most valuable descending down to 1 for least valuable.
6. Draw conclusions
Once you complete all five steps in considering and evaluating your potential projects, all stakeholders must get together for a consensus discussion.
You’ll want people to have the opportunity to review the material and provide additional important insights.
Only then should you make your final decision.
From the Coach’s Corner, here additional tech tips that enhance your financial situation:
10 Best Tech Strategies for Stronger Financial Results — Businesses that use 10 digital best practices are achieving stronger financial results than those that don’t.
Best Practices for CFOs to Stay Current in Technology — Just as every professional knows, CFOs also find it increasingly challenging to stay up-to-date on technology.Up-to-date technology means CFOs can better do their jobs. Here’s how.
9 Tips to Train Employees to Protect You from Cyber Crime — It takes a team approach to protect your organization against the skyrocketing rate of cyber crime. Here are nine training precautions necessary to make sure your employees help you guard against security threats.
“If we continue to develop our technology without wisdom or prudence, our servant may prove to be our executioner.”