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Calculating R.O.I. of IT- the Return on Investment of Information Technology (IT)

Strategic IT develops strategies that consider four primary factors associated with IT projects:
Factor Definition Value ... Common Perception Strategic IT Considers
Costs Money committed Decreases as costs rise. IT is an expense that costs too much. Total costs including:
  • support
  • training
  • integration
  • etc.
  • Benefits Money returned or saved Increases as benefits rise. IT could do more for us. Total benefits including:
  • future options
  • external value
  • etc.
  • Time Delay between costs and benefits Increases with deferred costs and earlier benefits IT projects are always late.
  • time to market
  • adoption rate
  • full life cycle
  • etc.
  • Risks Probability of failure Decreases as risks increase. We rely on IT to operate.
  • obsolescence
  • scalability
  • flexibility
  • opportunity loss
  • etc.
  • Car Analogy View Presentation: Intro to R.O.I. Example R.O.I. Spreadsheet Sample ROI comparison

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