5 Key Aspects of Information Technology Project Justification
January 9, 2015 | Best practices
Scott Millhollin Senior Manager, Product
How do you justify an IT project? It’s all about communicating with all levels of the organization and the power of teamwork.
Building relationships with business leaders and C-Level colleagues helps you understand how the business works. Bringing this insight into the IT organization broadens the knowledge of the IT staff and helps them understand how critical it is to think business first.
Leveraging the relationships and the information exchange between IT and the rest of the business feeds directly into these 5 steps that build a compelling story for your IT projects that will increase the chances of approval.
What business goals and or strategic initiatives will benefit from the project and how?
What are the projected capital payback and ROI periods?
Which business units will benefit and have they bought in?
Which employees will benefit and how?
Did you evaluate any other architectures and or vendors?
Requesting investment in IT applications and or infrastructure is a challenging event. In the not too distant past, if the justification for an investment was that IT was going to reduce costs and get more efficient or provide a more stable environment, then you likely got approval. In today’s IT world, alignment with business needs and leaders is crucial. Everything IT does must show either direct support for corporate and business unit strategy and initiatives. How do we accomplish this? Who do we talk to? Why will the rest of the business help IT? What are the relevant financial, technical, and operational details?
Aspect 1 – Business leader buy in. This is critical. In today’s world, the business leaders are more deeply invested in IT than ever before. Many business leaders of today grew up with technology and have a good understanding of it. They use laptops, tablets, and smartphones. They know about cloud services from Salesforce.com to Amazon AWS. Therefore, build relationships with your business leaders. Learn about their needs and wants and help them understand the supporting IT strategy. Then, when a project is identified, work closely with them to develop the story about how the IT project aligns with their needs functionally, operationally and financially.
Aspect 2 – Work with the CFO and his team on financials. This is another very important step. Work to build the relationship with this team by reviewing monthly and or quarterly financial data about IT and how you are operating. Stay engaged with them between these financial reviews when anything of financial significance comes across your desk. This will show that you are invested financially in the IT department and how it impacts the rest of the business. When you are presenting the project justification to your C-level colleagues, if the CFO is nodding his head in agreement and providing support, you will be in good shape.
Aspect 3 – Create a credible business case by including key challenges and how they will be solved. Everyone knows that projects will encounter challenges during the implementation. It’s imperative that you include examples of the types of challenges that are likely to be encountered and how these will be addressed so that the impact to the project is kept to a minimum. For example, with an application project, there will be multiple changes to the scope of functionality that the application must provide. This should be presented along with methods to minimize the scope creep to stay within budget.
Aspect 4 – Provide a concise summarization of the evaluated options with Pros and Cons. How often have any of you developed a single application or infrastructure solution without evaluating any other solutions? I’m pretty sure the answer is almost never! So, why not include the solution options in the presentation. You’ve already done the work, so create a comparison matrix for the options with the Pros and Cons of each. Assuming the Pros and Cons align with the recommended solution, this is a great way to give your C-Level colleagues the information they want in an easily understood format.
Aspect 5 – Communicate the business challenge(s) and goal(s) with IT and work to ensure the recommended solution delivers. While you are establishing and building relationships with corporate, business unit, and financial leaders, you are getting deep insight into how the business runs and the opportunities. Bring this information to the IT organization. Make sure the business initiative that is driving the IT project is documented in the requirements and is not overlooked. This way, when each of the alternative solutions are evaluated, you can rest assured the business needs are met.