An extract from our article on Business Value.
Business Value must be expressed in the language of the business. The language of the business is profit. As such, there is only one definition of Business Value for a Corporate IT department or Product Company:
One or more of the above should be increased although not at the expense of the others. For example, a project that delivers on time but results in staff leaving has reduced the assets (staff) and hence return on investment.
Increasing or protecting profit is achieved by:
* Increasing or protecting revenue
* Reducing costs
Many IT projects start without the business value being clearly articulated. As a result, it is difficult to determine whether they are a success from a business perspective. It is also difficult to decide when the project has completed. Business Value provides a simple measure for determining when to stop a project. Once the estimated cost of implementing additional software is greater than the expected business value released, the project should stop until additional value is discovered or the cost reduces.
Posted by chrismatts at October 8, 2003 5:14 PM