OpenKPI βεŧă

Number of applications reused by more than one business, this shows how much effort are going in creating reusable assets.

Percentage of project outcomes that meet business objectives at completion

Actual versus planned ROI for implementation of key initiatives

Planned ROI and Actual ROI are two different things and very often they are used interchangeably.  So in shared services, if you outsource within US you can get 15% ROI and if it is off shored you can expect 30% to 40% ROI.  For a very long time, these were the numbers that were floating around (with minor variations).  Otherwise there will be a huge gap between Planned ROI (what you think will be in the cash box) and Actual ROI (what is actually in the cash box)

Here are some best practices to minimize the gap between Planned ROI and Actual ROI

• Communicate clearly what ROI is expected out of Globalization efforts.
• Differentiate between First Year ROI and Ongoing (steady state) ROI to avoid confusion and set expectations.
• Factor in all the costs (TCO- Total Cost of Ownership).  Do not leave out any costs required to make the ROI reach a particular target.  Call a spade a spade.
• Document and communicate top 3 assumptions associated with the ROI (For example, you can state that in order to achieve 35% ROI, you have made the assumption that the implementation process will be completed in 6 weeks).
• Clearly define what will happen if the assumption is not met, at least directionally.  For example, in the case above you can state that for every additional week delay in implementation process, the ROI for the 1^st year will be lowered by 2%.  With little effort you can easily model such impacts (or you can call Zinnov and we love to help you with such modelingJ).
• Define all the tracking and reporting mechanisms needed to capture actual ROI.
• And finally, in the event that you deviate away from the goal, do not strike the panic button and state that Globalization does not work.  Conduct a Root Cause analysis and approach it like you would with any other problem.

So let’s review in simple terms:

Planned ROI – Actual ROI = Zero (you are doing as planned).

Planned ROI – Actual ROI = +ve (Not good. Conduct a rapid assessment to decipher what is going on. Often, you do not need consultants for this though we are happy to take your money and find the same problems you would have found anyways).

Planned ROI- Actual ROI = -ve ( You may be celebrating because you made more than you planned but it also reflects poorly on your planning.  You should call us because we can give you some good peer group “benchmarks”)

Percentage of projects compliant with architectural standards=No. of projects complaint with architectural standards [Architecture standards are created by enterprise architecture group or technology architecture groups]/Total no. of projects undertaken

Dollars saved through productivity improvement and reusable code, this indicator depends heavily on production improvement indicator, which need to be modeled, based on the industry and environments.

Percentage of project requirement fulfilled via reuse, this indicator will reflect the re-usability in an IT organization.

number of requirements which were fulfilled with some reusable code / total requirements fulfilled.

Increase in project management maturity –maturity can be derived from on time, cost, quality, scope delivery of projects, it also includes the effective use of communication in resolving issues.

Percentage of budgets within scope (promised content)=Total budgets of all projects which were less than or equal to the planned budgets and with planned scope [which never reduced on delivery] / Total budget

Share of technology planning projects evolving into full projects = number of planning projects which ended up as a project / total number of projects [planned project which ended as an  project implemented + planned projects which are shelved for latter implementation,  or scrapped off]

Total spend on non-compliant projects as a percentage of total project spending. Non Compliant Projects are those projects which fail to meet the Architecture standards and policies. Architecture standards and policies like Data policies / standards, Information system policies.