IT Investment Governance

Question 1

What is IT investment governance concerned about?

Answer 1

Ensuring that IT investments deliver real value.

Question 2

What are the 7 steps of the IT investment process?

Answer 2

1. Briefly describe the industry
2. Briefly describe the organisation
3. Establish evaluation criteria
4. Scan for contenders
5. Identify a shortlist
6. Select the best alternative
7. Recommend

Question 3

What are the 3 types of criteria when evaluating IT?

Answer 3

1. General criteria (i.e risks, benefits, and costs)
2. Functional requirements criteria
3. Technical requirements criteria

Question 4

When valuing ERP, what are the 4 elements of a project perspective?

Answer 4

1. Financial perspective - Implementation and operating costs
2. Innovation & Learning - Can it meet changing needs (modification)
3. Customers - Does it efficiently support end user needs
4. Internal processes - Does it aid in improving business processes

Question 5

What are the 6 cost benefit analysis measures when valuing IT?

Answer 5

1. Total Cost (TCO)
2. Cost Benefit Ratio (benefits/tco)
3. Payback period
4. Return on Investment
5. Net present value
6. Internal Rate of Return (IRR)

Question 6

How does IT create business value?

Answer 6

By being used effectively.

Business spends on IT -> Then gets IT as an asset -> Effective use of the IT results in positive impact -> The positive impact results in improved business performance (the value)

Question 7

In an organisation, what needs to change for IT benefits to be realised?

Answer 7

1. The nature of the business
2. Business processes
3. Skills & competencies
4. Organisation

Question 8

What does benefits realisation needs?

Answer 8

1. Activist accountability & ownership
2. Relevant measurements linked to outcome & to lines of accountability
3. Proactive change management from senior management