2006_030919 - 4 - Prioritising Technology Investments September 2003 © 2003 Sixhills Consulting Ltd & Author templates. A key deliverable from this stage is a through assessment of the currently proposed development expenditure  Step 3 - Assemble Benefits and Risk Assessment. Third, the cost, benefits and risks of the proposed investments are established together with possible alternative options. As a first pass, investments are evaluated at project level. Descoping projects at feature cost level to reduce spend is also possible, but time consuming. If the organisation uses an established traditional heavyweight development lifecycle methodology (rather than iterative/agile) then the opportunity offered by descoping may be limited once projects are underway. The projects are scored using the scorecard developed in the prior step, usually by referring to the project teams and other sources  Step 4 - Prioritise Current and Proposed Investments. In the final step, the proposed investments are ranked in terms of the agreed risk and return metrics actionGoTo:4,(Exhibit actionGoTo:4,4). Recommendations can then be made based on the decision factors chosen. This step may iterate depending on constructive feedback during the process of syndicated the recommendations across organisation Exhibit 4 - Developing Recommendations – Scorecard Example ScorecardProgramme Portfolio Master List~~~~~~~~~~~~~~~~~~~~~~~~Description639871010Priority– …~~~– Payment System~~~– New Trading System~~~– P2P~~~– EuroStatusInitiativeBenchmark score•OK (‘Green’), e.g.,– High score (above benchmark)•Query (‘Yellow’)– Fits neither other categoryrefer for decision•Reject (‘Red’), e.g.,– Low scores, below benchmark– Unclear support/need– Insufficient capacity to implement– No real projectRecommendation DevelopmentSingle Weighted ScoreOther Decision Criteria20%Technology 20%Compliance10%Operational14%Service16%Strategic AlignmentScore20%Financial ImpactWeight-ingReward20%Technology30%ProjectScore50%BusinessWeight-ingRisk What does this mean? Experience suggests that savings of at least 15-20% of the development budget are possible by applying a rigorous prioritisation methodology. As IT development budgets for large banks and institutions often exceed $200m, the savings can themselves amount to a one-time benefit of $30-40m. Institutionalising the prioritisation framework as a primary management discipline renders a structural change ensuring savings are captured year-on-year. Based on this savings potential, a compelling case with substantial ROI can be made for a self-funding project to manage down the discretionary development spend. Not only can costs be contained, however, since judicious readjustment of budgets ensures that new business opportunities get a fair share of resources, so avoiding the trap of the ‘Innovators Dilemma’ Gueritz, September 2003
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