Cut, cut, cut is all that I here these days, as the economy continues to show no signs of significant improvement. Those days of coffee and donuts at my morning meetings are gone, as well as are those gluttonous holiday parties that I used to look forward to. The mantra today is all around how the organization can cut costs and drive home a meager profit to investors. Among the first items on the chopping block are IT new development projects. The organization is willing "to keep the lights on," but is looking forward to cutting that $10 million investment on an enterprise data hub. Given the economic climate and the cost-cutting mentality, let me offer you some strategies on cost-justifying BI projects.
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Associate the project with a cost reduction initiative
You will get past the initial cut if the project is associated with helping reduce costs. For example, if your project replaces existing mainframe-generated reports and you can save $1 million per year on paper costs, the project has met the cost reduction criteria. Similarly, if by implementing the system the organization can commit to reducing headcount by two employees in the current year, then the criteria have been fulfilled. In these times, organizations are looking for hard savings. These are items that you can commit to and will be deducted from your budget as savings for the corporation. Soft savings, such as improving the efficiency of workers by 10 percent, won?t fly in these times of uncertainty. Similarly, revenue generation BI initiatives such as a customer intelligence system are tenuous, as there is no guaranteed return.
Deliver a large percentage of the value in the current year
When money is tight, most organizations are unwilling to take on large, multiyear initiatives that may or may not be completed. A three-year BI effort to build the world?s largest customer database is not likely to be funded now. Focus on maximizing return in the current year. This may lead to more tactical BI efforts that replace an inefficient reporting mechanism or make financial reporting smoother, but there is a high probability of delivery. Although Gartner?s reports on IT investment and IT strategy are well and good, the focus is really on what you can return to the shareholder this year. In tough times, this becomes even more explicit. By returning value to the business in the current year, you are more likely to save the project.
Focus on functional initiatives; avoid enterprise ones
While I strongly support enterprise data initiatives, this is simply not the time to pursue them. They cost a lot, require executive sponsorship across functions, and take a lot of time to deliver. During economic downturns, executives are focused on turning a profit and will not want to take on an enterprise IT sponsorship. They are hesitant to take these risks even in good times, so in bad times they won?t even give enterprise efforts a look.
Always tie the projects directly to business strategies
The project owner should ensure that every BI effort proposed ties directly to the business strategies. Alignment to the business is key in even getting the idea through the first checkpoint. To show value with relation to business strategies is key in winning supporters.
Hopefully, these tips will help position your BI projects and ensure that they find funding and sponsorship in these tough economic times.
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"I've always believed in the adage that the secret of eternal youth is arrested development." - Alice Roosevelt Longworth |
