April 25, 2008, Newsletter Issue #50: Some Financial Connections To IT/BI Project Investment

Tip of the Week

One BI analyst/developer, Foster Hinshaw, has estimated that 10 percent of corporate IT spending may be related to BI technology. With such an estimate, it is no wonder that BI vendors have devoted development resources to providing solutions directed to areas like Software Development Life Cycle management tools. One developer, Cognos, has devoted an entire segment of a product offering to decision aspects of project management decision support.

That application identifies some key financial metrics related to IT/BI that may shed some light on the efficacy of such project related uses for BI software products. For example, in order to monitor key project indicators critical to managing scope, unplanned changes, and normal path adjustments, Cognos provides the ability to set planning goals and scorecarding metrics for:

· IT project completion

· IT project lead time

· IT project ROI

· External & Internal resource days

· New initiatives & Initiatives rejected

· IT project cost & Value

· Project duration & Variance

As with all information, context is important to full understanding. In BI terms, context is roughly equivalent to placing dimensions on the metrics. Examples of dimensions in IT/BI include investment level, complexity, dynamics state, scope and risk. The Cognos SDLC Management Decision Area provides the capability for IT professionals to ask questions, or query the system as to:

- Project duration: Where are the greatest percentage and absolute variances for projects based on department and project team?

- Internal/External resource days: What is the trend in internal and external resource days for project complexity—how are we using our own team?

- IT project ROI: What return do we see on projects based on their cost, complexity and risk level?


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