w do you set and measure Business Benefits for IT Projects?

Has it ever occurred to you when you are gathering requirements for a process, function and capability that you are looking at automating, but struggle to define and measure the business benefits of each requirement you have scope to be implemented.

First let’s look at definition of benefits:

The key benefits that every IT project is expected to delivery to business fall into following categories:

Process Cycle Time – This is applicable to operational processes within an Organisation.  By selecting the most appropriate processes to automate there can be a significant reduction in cycle time. By most appropriate processes it means the processes should be repeatable, having unnecessary handoff points, dependent on critical information being passed etc.

Operational Effort and Costs – This is applicable to ongoing costs of an Organisation in maintaining and running its business. By selecting the most appropriate business operations to automate there can be a significant reduction in operational costs and effort as compared to the software implementation and maintenance cost.

Time to Market – This is applicable to launching new products to market. By digitizing information/data flow will help achieve faster turnaround, higher quality and lower prices. By building electronic links with suppliers, sales and in house functions planning cycle can be compressed.

Singular operational entities – This is applicable to process functions, job functions, systems within an Organisation. Despite the physical boundaries in the organisation units by implementing centralization systems and business functions ongoing operational efficiency can be obtained.

Faster Decisions – With the right information at hand one can make faster decisions.

So, the next time you define each requirement always think in terms of the above benefits the solution to the requirement will help achieve.

How do you measure business benefits?

Let’s take an example:

A typical high level business process for a new commercial product launch looks like the following


Business function

Benefit measurement metric

Launch a new Product

Time taken to build the Product catalogue.

Time taken to evaluate and select Suppliers.

Time taken to identify operational changes to help support new Product.

Provide Quotes

Time taken to support self service quotes

Effort and time taken to process quotes

Quote rejection rate (by reason)

Accept Orders

Time taken to build Online Ordering (web based)

Fulfil Orders

Effort and Time taken to process Orders (Contact Suppliers, build product, ship product)

Order rejection rate (by reason)

Order delay rate (by reason)

Bill the customer

Effort and time taken to process and send bills

Effort and time taken to resolve billing queries

Billing error rate (by reason)

After sales support

Effort and time taken to log and respond to a complaint/fault/query.

Effort and time taken to resolve a complaint/fault/query

These are the most likely benefits that an IT project should deliver. These metric can be obtained pre and post implementation and compared to realise the benefit.