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according2jb.com
Solutions
Some of the methodologies. At rest. Ready for battle.
B U S I N E S S M O D E L A N A L Y Z E R
This methodology can be used in many decision making contexts. A powerful swiss army knife.
Overlayed with business process mapping notation provides holistic view of the new IT’s reach.
Your company business model defines who you are as a competitor in a capitalist economy. Strategic information technology investment requires that managers can take apart the company’s business model and fully understand its component parts and their relationships to each other. Supposing we are considering a major investment in supply chain software. What aspect of our business model will be directly impacted by the investment? A deep business model deconstruction will illuminate for managers just how closely aligned the investment is with strategic goals of the company.
V E N D O R S E L E C T I O N F R A M E W O R K
Poor vendor selection can destroy value quickly.
Try inspecting a vendor for its unique capabilities that might deliver overlooked value.
You are going to hire a service provider for an exciting new IT project. Perhaps your firm has labored over a Request for Proposal and, say, four vendors have responded. Selecting the right vendor can be tricky.
How do you quickly sift through the mass of information in all the responses to summarize the key elements and present them in an easily understood way for efficient decision making? How do you construct useful vendor selection criteria that align snugly with company needs and strategy? How do you weight criteria to give more emphasis to some considerations versus others?
C H A N G E M A N A G E M E N T
IT investment change is antecedent, concurrent and consequential. Time an analysis and response for each type accordingly.
Change has many faces: process, people, technical and sometimes strategic. In big investments all should be accounted for.
The very concept of introducing a new technology into your organization means change. Have you identified it from every possible context: organizational, technical, people, strategic? Have you prepared for it? What does it look like? And how will the consequences of change factor into the base cost profile of a value analysis.
Change with new technology emerges in many ways. Business processes change. Job responsibilities change. The company might need to ADD personnel to extract maximum value out of the investment. This is most certainly change. Skills might need augmenting before the implementation occurs. What kind preparatory change needs to be explored?
D E C I S I O N D E B I A S I N G
The literature on decision bias is voluminous. It runs the gamut from simple bias towards more recent versus older information all the way to Ellsberg’s Paradox.
Attacking assumptions in modeling costs and benefits can be an effective approach in unearthing bias.
One mid sized company invested in business process management software because the senior manager’s girlfriend would oversee its use and therefore, expand her scope of responsibility. It might have been useful software – if anyone knew how to use it. Such grotesque examples of decision bias are gratefully rare. But more subtle biases can creep into decisions, especially when one’s biases are confirmed [even though the “data” is not truly objective.]
Extracting biases out of investment decisions take real work and manager training to be on the lookout for it. But morale jumps when employees believe investment decisions are objectively arrived at.
I T I N V E S T M E N T P R I O R I T I Z A T I O N
Criteria will include some difficult-to-measure qualitative assessments. Don’t discard them from the discussion.
Prioritization can be tucked into portfolio mgmt. But don’t let PM software limit the scope of the prioritization exercise.
In mid size and larger organizations often time several IT investment proposals compete for funding at the same time. How do companies arrange all the proposals seeking approval and sequence them based on pre-defined criteria? Do we have the resources to pull the trigger on concurrent projects? What criteria should managers use that make sense for the business? Many companies determine that scoring correctly with a mix of strategic and operational objectivcs are paramount. Is there room for any riskier criteria?
N E W T E C H N O L O G Y E X P L O R A T O R Y
Consider a structured, consistent methodological approach to exploring a new technology that has generated the interest of senior management. Typically these technologies [like AI] are potentially hugely transformational, touch many parts of the organization and are riding the crest of the hype cycle. They carry a lot of uncertainty. Undertake a pre-investment decision making exercise that answers basic questions about the technology and determine its enterprise fit. The fundamental question becomes: is this tech worth our time for a formal value analysis and business case, or, perhaps, should we defer into the future?
A methodology deliberately meant to avoid all the heavy lifting of a fully burdended ROI analysis and business case. Some early key questions can be answered here to determine whether a more resource-intensive analysis is called for.
Couple the exploratory with an Expression of Interest statement from the senior managers who instigated this Easter egg hunt. Get them to put in writing: what they know about the new IT; what they believe it can do for the company: how they see the new tech supporting business goals.
R E T U R N O N I N V E S T M E N T
The sine qua non of IT investment value expression is Return on Investment. A deceptively simple calculation:
PROFIT/INVESTMENT
This simple arithmetic is foundational to all the methodological tools offered by according2jb.com. We have spent 20 years refining the thinking that influences this calculation so that both the numerator and denominator now account for a breadth of tangible and intangible elements that can be included with qualifiers in the calculation. Managers often pull their hair out over intangible benefits that are difficult to sell to the C-suite. There is no easy way to quantify these but nudging these hard-to-measure benefits toward quantification is possible with the right approach.
All methodologies in the portfolio can be applied either to the numerator or the denominator of the deceptively simple ROI equation. In this way decision makers are given a much richer portrait of all the levers of costs, risks and benefits that will impact value creation and that will affect planning, resource allocation and a thousand other decisions.
Every methodology will be applied to the numerator, which will ikely reduce the numerator value, or to the denominator, which will add to the denominator value. The top will include money numbers that include the probability of adverse events occuring which detracts from value. The bottom will include incremental expenditures directly tied to the purchase price of the technology, which will increase the investment price and stress the expected value.
In this way the ROI analysis becomes fully burdened with risks and other unearthed costs. Costs that were lurking at the beginning of the exercise but that are now illuminated.
We can dream about profit. But IT rarely if ever contributes directly to profit, strictly defined. “Profit” more often than not is a proxy for value - harder to define and quantify.
Not all tools will be relevant to all enterprises. What methodologies are employed will turn on the unique attributes and needs of the client: culture, risk tolerance, existing governance, cost of capital, commitment to financial discipline, competitive position, alignment of the proposed technology with enterprise strategy, technology investment track record and the preferences of senior management. For example managers might assess their financial modeling is strong but would like to be more consistent in assessing the cybersecurity risks as a key feature of investment analysis. We can tailor the solution to your precise needs.
The according2jb.com difference
Clarity above all else. The goal of according2jb.com is to help the enterprise frame the key issues and questions around a specific technology investment and help the enterprise form a well-considered business case for the proposed project.
Fortifying the client for the next war. Unlike consultants who offer useful guidance on a one-off basis for each discrete investment, according2jb.com provides the customized guidance as well as the analytical tools for licensing as part of the engagement. It is our goal that clients walk away educated from the experience and armed with the complete suite of methodologies for the next 100 investments.
How do we achieve results for clients? According2jb.com for more than twenty plus years has built battle-tested proprietary methodologies rooted in well-known management techniques and principles that have proven their mettle in a range of business contexts. We put these tools to work in the service of the organization in need of decision support. The tools and template are universal in design and concepts but bespoke in addressing the specific conditions and circumstances of the organization as they are embarking on an IT buying journey.
The according2jb.com differentiator. According2jb.com does not seek to return to the well after the first drop of the bucket unless the client seeks it. We are confident that these easy-to-understand yet powerful tools will provide the client all the intellectual firepower for future IT investments. How does the saying go?
"Give a man [woman] a fish, and you feed him for a day. Teach a man to fish, and you feed him for a lifetime."