SCHOOL

SCHOOLOF
OFGRADUATE
GRADUATESTUDIES
STUDIES

MSIT 205
ADVANCED PROGRAMMING
3rd Trimester SY 2019-2020

MEASURABLE ORGANIZATIONAL VALUE

AND THE BUSINESS CASE

LEA JEAN Q. BACUS

 SCHOOL OF GRADUATE STUDIES

OUTLINE
• Measurable Organizational Value (MOV)
• The MOV and Project Objectives
• Developing the MOV
• The Business Case
• Definition of Business Case
• Developing Business Case
• Project Selection and Approval
• The IT Project Selection Process
• The Project Selection Decision
 SCHOOL OF GRADUATE STUDIES

• Measure of Success
• Support the organization’s vision, mission, and
strategy.
• Conceptualizing the purpose or goal of the
project.
• Overall goal
 SCHOOL OF GRADUATE STUDIES

MOV Objectives
• measurable
• value
• agreed
• verifiable
 SCHOOL OF GRADUATE STUDIES

Project Objectives

• Supports the MOV

 SCHOOL OF GRADUATE STUDIES

Project Objectives
• scope which is the project work need to be
completed.
• schedule(time)
• budget(money)
• quality(conformance of fitness for use)

• Supports the MOV

SCHOOL
SCHOOL OF GRADUATE
GRADUATE STUDIES

PROJECT GOAL

SCHEDULE

QUALITY
BUDGET
SCOPE
 SCHOOL OF GRADUATE STUDIES

The Business Case

• Analysis of the organizational value, feasibility,
costs, benefits, and risks of several proposed
alternatives or options.
• Developing a clear, concise MOV that is accepted
by the project stakeholder and is then
documented.
 SCHOOL OF GRADUATE STUDIES

Good Business Case Attributes

• Thorough in detailing all possible impacts, costs,
and benefits
• Clear and logical in comparing the cost/benefit
impact of each alternative
• Objective through including all pertinent
information
• Systematic in terms of summarizing findings
 SCHOOL OF GRADUATE STUDIES

Developing the Business Case

Select the Core Team
Define Measure Organizational Value (MOV)
Identify Alternatives
Define Feasibility and Assess Risk
Define Total Benefits of Ownership
Analyze Alternatives
Propose and Support the Recommendation
 SCHOOL OF GRADUATE STUDIES

Select the Core Team

• Credibility
• Alignment with organizational goals
• Ownership
• Agreement
• Bridge Building
 SCHOOL OF GRADUATE STUDIES

Define Measure Organizational Value (MOV)

• Be measurable
• Provide value to the organization
• Be agreed upon
 SCHOOL OF GRADUATE STUDIES

Drives
Organizational
Vision & Mission

Organizational Drives
Strategy
Supports

Project’s
Organizational
Measurable Value
Supports
(MOV)

The IT Value Chain

 SCHOOL OF GRADUATE STUDIES

Developing the MOV

• Identify the desired area of impact
• Project value
• Appropriate metric could be expressed in money,
percent, numeric.
• Set a time frame
• Verify and agreement from stakeholder
• Summarize in clear, concise statement/ table.
 SCHOOL OF GRADUATE STUDIES

Developing the MOV

• Identify the desired area of impact
Potential Area Examples of Desired Impact
Strategic • Penetration of new market
• Transformation of the terms of competition within the market
• Increased market share
Customer • Customers have more choices of products or services
• Customers receive better products or services
• Transaction processes are more efficient or effective
Financial • Increased profit
• Increased margins
Operational • Lower costs due to streamlined operations
• Increased operational effectiveness
• Improvements to supply chain
Social • Education
• Health
• Safety Environment
 SCHOOL OF GRADUATE STUDIES

Developing the MOV

• Identify the desired area of impact
• Project value
• Appropriate metric could be expressed in money,
percent, numeric.
• Set a time frame
• Verify and agreement from stakeholder
• Summarize in clear, concise statement/ table.
 SCHOOL OF GRADUATE STUDIES

Developing the MOV

• Project value
Better
What does organization want to do better?
Faster What does organization want to do faster?
Cheaper What does organization want to do cheaper?
Increase Growth What does organization want to do more that its current
position?
 SCHOOL OF GRADUATE STUDIES

Developing the MOV

• Identify the desired area of impact
• Project value
• Appropriate metric could be expressed in money,
percent, numeric.
• Set a time frame
• Verify and agreement from stakeholder
• Summarize in clear, concise statement/ table.
 SCHOOL OF GRADUATE STUDIES

Developing the MOV

• appropriate metric could be expressed in money, percent,
numeric
• provide project team with a performance target or
directive
• set expectations among all stakeholders
• to evaluate a project
 SCHOOL OF GRADUATE STUDIES

Developing the MOV

• Identify the desired area of impact
• Project value
• Appropriate metric could be expressed in money,
percent, numeric.
• Set a time frame
• Verify and agreement from stakeholder
• Summarize in clear, concise statement/ table.
 SCHOOL OF GRADUATE STUDIES

Developing the MOV

• Identify the desired area of impact
• Project value
• Appropriate metric could be expressed in money,
percent, numeric.
• Set a time frame
• Verify and agreement from stakeholder
• Summarize in clear, concise statement/ table.
 SCHOOL OF GRADUATE STUDIES

Developing the MOV

• Identify the desired area of impact
• Project value
• Appropriate metric could be expressed in money,
percent, numeric.
• Set a time frame
• Verify and agreement from stakeholder
• Summarize in clear, concise statement/ table.
 SCHOOL OF GRADUATE STUDIES

Identify Alternatives
• change existing process without invest in IT
• adopting app developed by diff area within
organization
• reengineer the existing system
• purchasing an off-the-shelf app package from
software vendor
• custom build a new app using internal resources/
outsourcing the development to another company
 SCHOOL OF GRADUATE STUDIES

Define Feasibility and Assess Risk

• Economic
• Technical
• Organizational
• Others
 SCHOOL OF GRADUATE STUDIES

Risk should focus on:

• Identification – What can go wrong? What must go right?
• Assessment – What is the impact of each risk?
• Response – How can the organization avoid or minimize the
risk?
 SCHOOL OF GRADUATE STUDIES

Define Total Cost of Ownership

• Direct or up, front costs
• Initial purchase price of all hardware, software, and
telecommunications equipment, all development or
installation costs, outside consultant fees, etc.
• Ongoing costs
• Salaries, training, upgrades, supplies, maintenance, etc.
Indirect costs-Initial loss of productivity, time lost by users
when the system is down, the cost of auditing equipment
(i.e., finding out who has what and where), quality
assurance, and post implementation reviews.
 SCHOOL OF GRADUATE STUDIES

Define Total Benefits of Ownership

• Increasing high-value work
• For example, a salesperson may spend less time on paperwork and more time
calling on customers.
• Improving accuracy and efficiency
• For example, reducing errors, duplication, or the number of steps in a process.
• Improving decision-making
• For example, providing timely and accurate information.

• Improving customer service

• For example, new products or services, faster or more reliable service,
convenience, etc.
 SCHOOL OF GRADUATE STUDIES

Analyze Alternatives
• Payback
• Breakeven
• Return on Investment
• Net Present Value
• Scoring Models
 SCHOOL OF GRADUATE STUDIES

Payback
Payback Period = Initial Investment
Net Cash Flow
= ₱ 200,000
₱20,000
= 10 years
 SCHOOL OF GRADUATE STUDIES

Breakeven
 SCHOOL OF GRADUATE STUDIES

Return on Investment
 SCHOOL OF GRADUATE STUDIES

Net Present Value

SCHOOL OF GRADUATE STUDIES
 SCHOOL OF GRADUATE STUDIES

Propose and Support the

Recommendation
• Once the alternatives have been identified and
analyzed, the last step is to recommend one of
the options.
• The business case should be formalized in a
professional-looking report.
• quality and accuracy of your work will be a
reflection on you and your organization.
 SCHOOL OF GRADUATE STUDIES

Propose and Support the

Recommendation
• ABC Corporation should immediately install the
intranet GKB. It has an IRR of 109 percent, an
NPV of over $3 million, an ROI of 125 percent,
and a payback period of 12.5 months—all much
better than ABC’s hurdle rates. Intangible
advantages include enhancing ABC’s competitive
advantage via more, better new products, thus
increasing revenues and profi ts.
 SCHOOL OF GRADUATE STUDIES

THE IT PROJECT SELECTION PROCESS

• Meet the minimum requirements
 SCHOOL OF GRADUATE STUDIES

The Project Selection Decision

• The IT project must map directly to the organization's
strategies and goals.
• The IT project must provide measurable organizational
value that can be verified at the completion of the project.
• The selection of an IT project should be based upon
diversity of measures that include:
• Tangible costs and benefits
• Intangible costs and benefits
• Various levels throughout the organization (e.g., individual,
process, department, and enterprise)