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IT Portfolio management step by step - Maizlish B

Maizlish B, Handler R. IT Portfolio management step by step - John Wiley & Sons, 2005. - 401 p.
ISBN.: 978-0-471-64984-8
Download (direct link): itportfoliomanagement2005.pdf
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APPENDIX Αΐ_______________________________
Value Categories and Value Factors
• Financial
• Net present value: the sum of the annual net savings and other tangible benefits, which have been discounted by an estimated interest or hurdler rate that is commensurate with the risk (grow, run, and transform investment categories should have different hurdle rates to reflect their varying levels of risk). The value in using NPV is that the effects of time and the cost of money are made consistent, thus enabling products of different-length development times and variable payback periods to be compared.
• Return on investment: the sum of cash inflows divided by the sum of all cash outflows for a given period of time.
• Payback period: the amount of time that must pass before the benefits exceed the costs of the investment. When the payback period is expressed in years as the development cost divided by the annual benefit, it is the reciprocal of the investment’s return on investment. Most companies have established payback period requirements. Companies are looking for accelerated payback periods of less than a year.
• Cost avoidance: expressed by avoiding payment to external entities
• Revenue growth
• Cost reduction
• Strategic importance
• Business/strategic fit
• Customer retention
• Customer growth
VALUE CATEGORIES AND VALUE FACTORS 277
• Customer upselling and cross-selling
• Strategic alignment
• Compliance
• Revenue growth
• Ease of doing business
• Fulfill commitments
• Expand into new markets
• Provide revenue growth
• Improve competitive positioning
• Increase market share
• Improve negotiating power
• Improve brand
• User satisfaction
• Patent potential
• First to market
• Tactical importance
• Improve performance
• Reliability
• Responsiveness
• Improve quality
• Reduce cycle times—for example,
• Shortening sales cycle times
• Reducing time to market for new products/services
• Accelerating delivery of products or services to customers
• Shortening order-to-cash cycles
• Longevity
• Competency-enhancing
• Improve productivity
• Other competitive impacts
• Economic value added (business value added): used to assess the qualitative aspects of an investment through providing a numerical figure to IT investments’ contribution to attaining business and strategic objectives
• Strategic value: an index of customer satisfaction with the degree to which the operational product meets strategic business goals
• Tactical value: an index of customer satisfaction with the degree to which the operational product meets tactical business goals
• Risk mitigation
• Regulatory compliance
• Business continuity
• Security
APPENDIX 5Β
Risk Categories and Risk Factors
Category Risk Factors
(Examples shown below) (Examples shown below)
Technology Risk Security
Availability
Architecture
Business processes
Applications
Development
Disaster recovery
Complexity
Information
Performance
Integration
Feasibility
Maturity
Existing assets
Business Risk Strategic
Regulatory/compliance
Financial
Customer satisfaction
RISK CATEGORIES AND RISK FACTORS 279
Meeting objectives
Brand
Privacy
Alignment
Balance
Business continuity
External risks: environment, competitors, vendors, suppliers/partners, etc.
Costs
Asset protection
Project Risk Milestones
Schedule
Budget
Scope
Complexity
Costs
Other projects
Resource Risk Staff availability
Skills
Experience
Customer Price
Performance
Quality
Satisfaction
Operational Facility
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