Finding a Project's Intangible ROI
From the Voices on Project Management Blog
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Date
If you're new to project management, you might be surprised to learn that some projects -- maybe some of yours -- do not generate any actual profits.
That can make it difficult to demonstrate how talented you are as project manager and how great your project delivery team is. So, how can you show you've created value if you cannot show revenue or profits as a direct result of your project?
Look at ROI in a different light. Instead of using profits as a benchmark, consider intangible benefits, such as cost-savings that will result from the project, or a positive swing in public relations or team dynamics
My team and I were working on a project that involved automating a conference room. A user could walk into the room, push a single button and the automation would do the rest. The project didn't generate any profit, but the feedback from stakeholders was 100 percent positive: My team had created an environment that worked as advertised and made users' work lives easier and less frustrating. And that translated to a huge upswing in stakeholder influence.
When we needed buy-in on the next project, the stakeholders were more than happy to offer support. They even understood if the project would affect them negatively (i.e. space being unavailable for use during project, or a feature being disabled for a short time). It may be hard to say that stakeholders' good graces (for example) increased by exactly 42 percent, but it's very obvious when your ability to influence them has increased. Things seem to just run more smoothly.
Have your projects generated intangible ROI? How have your project teams benefited from it?
Posted
by
Taralyn Frasqueri-Molina
on: May 31, 2011 10:54 AM |
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PARAG KANDEKAR
VP Operations| SoftNice Inc
Allentown, Pa, United States
ROI could be Quantitative or Qualitative. Qualitative improvements is also considered as good achievement.
Deepesh Rammoorthy
ICT Project Manager ( PMP®AgilePM®Certified ScrumMaster® (CSM®))| Australian Red Cross Blood Service
Tarneit, Vic, Australia
A Project of mine involved
1) Upgrading A Commercial Off the Shelf System running on Windows 2003 to Windows 2012 and the Software Version of the system itself to establish Operational Support with the third party vendor and Microsoft.
As you can see clearly, We had to do the project for operational currency . But there is no clear Tangible Return on Investment. The Objectives of the Business Case Were
1) Protect the Organization against Security Vulnerabilities by using the supported Operating System .
2) To use the Supported Software Version from the Vendor
The application functionality remained the same because our Business did not wish to change what it had been using for years and rightly so.
To calculate the ROI , the following are unknown:-
The cost of us not using a supported Windows operating system and the saving by us upgrading the software cannot be easily quantifiable.
The organization has potentially avoided logging expensive support calls for unsupported software and Operating System , but we don't know how many calls and How much money we have saved?
Would the organization definitely have encountered issue with the older version of Operating System or the Software? We can't say that either.
Had we kept on using the older operating system would we have run into security vulnerabilities in six months time and what would be the cost of that?
Yes the upgraded software definitely has some code level improvements and the software doesn't crash as often as i did. Perceptibly it is performing well but it's not helping anyone do their job faster or saving them significant time and cost over the previous version of the same software.
So in conclusion looks like intangible ROI was achieved and some aspects of the ROI may yet be tangible but may need significant analysis to establish those metrics.
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