Business Value
ROI Workbook for IT Initiatives
This free Excel tool is a comprehensive general-purpose business value model (ROI calculator) to support the development of business cases for enterprise-scale information technology-based projects. It provides a robust structure to help organizations assess the business value (costs, benefits, TCO, and ROI) of technology projects/initiatives.
This workbook can be used as a standard corporate business case template for technology-based initiatives. It can also be used by consultants and technology vendors to articulate the business value of their products and solutions.
Downloads (free, no registration)
|
Version 2.0 |
Comments |
|
Recommended, but macros may be security-restricted in some organizations; Macros must be enabled |
|
|
Minor reduction in functionality: no change tagging |
|
|
Minor visual (3D graphics) degradation |
|
|
Minor visual degradation; Minor functionality reduction |
Model Features:
· Supports most types of enterprise-scale technology initiatives. Includes sample cost and benefit data for 18 common initiative types.
|
Infrastructure/Platform Technology Initiatives |
Business Technology Initiatives |
|
· PC Hardware & Operating System Upgrades · Server Hardware & Software Upgrades · Infrastructure Management / Networking · Storage · Security · Application Development / Architecture · Compliance, Governance, & Risk · Outsourcing · Wireless / Mobile |
· Office Productivity Software · Messaging / Collaboration · Content Management · E-commerce / Internet · Business Process Mgmt / Integration · Business Intelligence / Data Mgmt · Business Applications (Vertical, Line-of-Business) · CRM · ERP / Supply Chain |
·
Comprehensive assessment of
initiative costs and benefits
Costs: hardware; software; IT labor, training, and services; and user labor and training
Benefits: IT labor TCO savings, other direct cost savings, user productivity benefits, revenue growth, and non-financial key performance indicators
·
Calculates annual on-going
IT labor TCO
(total cost of ownership)
· Comprehensive financial analysis. Calculates project cash flow, cost-benefit analysis, ROI, NPV, IRR, and payback period
· Supports rapid (30 minute) or detailed (3+ day) assessments. This model was designed to provide either a rapid assessment (by just entering/selecting basic organizational profile and initiative information) or a very detailed (3+ day) assessment by modifying hundreds of detailed inputs.
· Protected, yet customizable: Essentially all values can be modified. Many custom cost and benefit items can be added. Formulas and other areas of the model that should not be modified are protected (locked) to maintain intended functionality. HCR can provide additional fee-based customization, if desired.
· Based on industry-standard calculations and industry-leading methodologies. It is as transparent as possible so the user is able to understand how the costs and benefits are calculated.
· Provides research-based default values. Default values (labor costs, user type mix, financial information, etc.) are provided based on your industry, geography, organization size and initiative type to enable more rapid assessments. Extensive research was conducted to find highly reputation sources for these. Data/estimate sources are listed. You may overwrite any of the pre-populated defaults.
· User-friendly. The workbook contains instructions, descriptions, and references. Results are updated real-time and are displayed graphically throughout the model. Includes macros to restore default values. Although the model is user-friendly, we recommend users have at least a moderately-advanced understanding of business value concepts to develop a credible business case.
· Free download. No registration required. See Terms of Use.
Model Components / Flowchart
Costs (the investment)
All one-time and on-going costs required to implement/deploy, adopt, maintain, and support the solution
|
Hardware |
Software |
IT Labor, Services, & Training |
End-User Labor & Training |
|
· PCs (new/upgraded) · Servers · Mobile devices · Storage · Networking equipment |
· Client/server applications · Client/server operating systems · Client access licenses (CALs) · Databases · Utilities |
· Planning, Evaluation and Project Management · Engineering · Development · Lab Testing · Pilot Testing · Rollout · Performance Tuning · Documentation · Implementation User Support · Consultants · External Services · Maintenance/ support · IT training (formal external, formal internal, self study) |
· Solution planning & testing · Downtime (Unable to be productive); e.g. during implementation of the solution · Resolution of issues related to the new solution · System configuration · Data entry · End-user training and ramp–up |
IT Labor TCO (Total Cost of Ownership)
Annual on-going/recurring labor and services required to support and maintain the “as-is” (current or status quo) and “to-be” (after the solution is deployed) environment
|
PC Management Services |
Help Desk (Tech Support) |
Server & Network Mgmt Services |
Application Development & Administration |
|
· PC HW / SW Evaluation · PC Image Management · User Admin & Provisioning · Application Management · Software Deployment · Security Assessment & Planning · Security Patch Management · Security Incident Remediation · Data Mgmt, Backup & Restore · Tools/GPO Management · 3rd Level Support |
· Proprietary Applications · Standard Desktop Software · Operating Systems · Hardware (except printers) · Data Communications/ Network · Password Resets · Databases · Service Requests · Voice Communications · Printers · Others |
· Network management · Hardware management · Operating system support · Server application mgmt · Security · Storage management · Database Mgmt & Admin · Other |
· Application Development
o
Design
o
Development
o
Testing
o
Support · Administration & Other
o
Planning
o
Purchasing
o
Finance
o
Training
o
Senior management |
Benefits
Direct and Indirect benefits enabled by the initiative – the “return” part of ROI
|
IT Labor/Services TCO Savings |
Other Direct Cost Savings |
User Productivity Benefits
|
Revenue Growth |
|
·
PC Management
Services
·
Help Desk (Tech
Support)
·
Server & Network
Mgmt Services
·
Application
Development
·
Administration &
Other |
·
IT Savings
o
Software - Clients
o
Software - Servers
o
Hardware
o
IT Services
o
Power/Electricity
Usage
·
Business Savings
o
Travel Expenses
o
Business Services
o
Operating Expenses |
·
Individual Computing
o
Document Creation
o
Data & Information
Access/Analysis
o
Email, Calendar,
Contact, & Task Mgmt
o
LOB
Application-Related Activities
·
Collaborative
Computing
o
Document
Collaboration
o
Workflow (routing)
o
Coordination /
Project Mgmt
·
PC Systems
Management
o
Support, Self-Help,
& Learning
o
Performance
o
Mobility & Remote
Connectivity
o
Security & Privacy
o
System UI Navigation
o
Availability &
Reliability |
·
Improved Sales
Effectiveness
·
Improved Marketing
Effectiveness
·
Improved Customer
Service
·
New/Expanded
Channels/Geographies
·
New/Enhanced
Products/Services
·
Improved Product
Availability (fill rate, up-time) |
Non-Financial KPIs (Key Performance Indicators)
Not all benefits can credibly be translated into financial ($) benefit terms. These are sometimes referred to as intangible benefits. The workbook provides a structure to estimate how the initiative may impact non-financial KPIs. There are 4-7 specific metrics/KPIs in each category below:
· Sales/Marketing Performance
· Business Management Effectiveness
· Supply/Operations Performance
· Technology Effectiveness
Description of Initiative Type Sample Data Included In the Model
NOTE: Sample data should not be used for making investment decisions. Sample data is not meant to represent average/typical project results and is not based on research. It should only be used as a starting place for assessing the business value of your project. Initiative costs and benefits will differ substantially from one organization to another.
Infrastructure/Platform Technology Initiatives
|
Key Features, Capabilities, Benefits |
Sample Vendors And Products |
|
|
PC Hardware & Operating System Upgrades |
·
Improved
performance, reliability, security, manageability,
productivity
·
Notebook, desktop,
thin-client |
·
Microsoft Windows
Vista, Linux, Red Hat, Novell
·
Dell, HP, Apple,
Toshiba, Lenovo, Fujitsu, Acer, Sony, Gateway
·
Intel, AMD |
|
Server Hardware & Software Upgrades |
·
Virtualization,
consolidation, clustering
·
Data center
optimization
·
Improved
performance, reliability, manageability, security
·
Multi-core, 64-bit,
RISC/Itanium, x86
·
Web servers,
application servers, DBMS servers, data warehouse servers,
infrastructure servers, high performance computing servers |
·
Microsoft Windows
Server, Novell SUSE, Red hat, Unix, Solaris, IBM AIX, HP–UX
·
IBM, HP, Dell, Sun,
Fujitsu, Bull |
|
Infrastructure Management / Networking |
·
Asset
inventory/management, OS management, configuration
management, change management, systems management, software
distribution, application packaging
·
Directory services,
group policy objects
·
IPV6, LAN, WAN
·
VOIP – voice over
Internet protocol |
·
Microsoft System
Center Configuration Manager, MDOP, Active Directory
·
IBM Tivoli, BMC
Software, CA Unicenter, HP, LANDesk, Novell ZENworks,
Symantec Altiris, Cisco Systems |
|
Storage |
·
Digital storage of
business data and documents
·
Archival, records
management, tape backup, SAN, NAS, disk arrays, iSCSI, fibre
channel
·
Capacity management,
performance analysis, storage provisioning, quota
management, event management |
·
EMC, HP, IBM, Sun,
Hitachi, EDS, Network Appliance
·
IBM DB2, Microsoft
Exchange, Microsoft SQL Server, Oracle, SAP |
|
Security |
|