No More Infrastructure Projects

Michael R. Wood is a Business Process Improvement & IT Strategist Independent Consultant. He is creator of the business process-improvement methodology called HELIX and founder of The Natural Intelligence Group, a strategy, process improvement and technology consulting company. He is also a CPA, has served as an Adjunct Professor in Pepperdine's Management MBA program, an Associate Professor at California Lutheran University, and on the boards of numerous professional organizations. Mr. Wood is a sought after presenter of HELIX workshops and seminars in both the U.S. and Europe.

 

All too often I hear the same lament from IT executives: "How do I justify infrastructure projects to management? How do I calculate the ROI?" My answer is simple--you don't! The truth of the matter is simple. Management does not care about backbones, fiber, routers, servers, WANS or LANS except as it relates to making or saving money.

Think of it this way. Suppose I came to you and want to do a project in your backyard that required me to re-grade the lot, put in French drains and condition the soil. Would you pay for that? Most likely not. By itself all those things have no perceived value because there has not been a context for doing the work. Now suppose you wanted to re-landscape your backyard with a waterfall that cascaded into a pond surrounded by exotic tropical plants. To do that you had to re-grade the lot, put in French drains and condition the soil among other things. You might pay for that.

So it is with infrastructure projects. They only have value in context to the business improvement initiatives they support. The rub comes when there are multiple projects supported by the improvement to the infrastructure. How do you allocate the infrastructure monies across those projects, especially if they are not going to be implemented at the same time? Here are two approaches you might find useful:

• Calculate ROI for a Cluster of Projects
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