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Method for a business value index

IP.com Disclosure Number: IPCOM000016498D
Publication Date: 2003-Jun-25
Document File: 4 page(s) / 102K

Publishing Venue

The IP.com Prior Art Database

Abstract

Disclosed is a method for a business value index (BVI). Benefits include improved functionality.

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Method for a business value index

Disclosed is a method for a business value index (BVI). Benefits include improved functionality.

Background

              Many information technology (IT) organizations conventionally lack systematic methods for assessing the value of their investments, and have a limited capability to predict the future value of their investments. Conventional processes do not generally enable data-based decisions that produce a prioritized portfolio of investments.

      Some project scoring mechanisms exist in various IT organizations but they do not appear to be as comprehensive or as holistic as the IT business value assessment.

General description

              The disclosed method is a BVI, which is a data-driven decision support tool and process for assessing and calculating the potential business value of an IT investment. BVI enables evaluation of an investment against three vectors: business value, efficiency, and financial attractiveness. The process also enables management to reassess the initial decisions at certain intervals to ensure the portfolio’s continued responsiveness to corporate strategy and the changing business environment.

              The key elements of the disclosed method include:

•             Projects the degree of an IT investment’s alignment with corporate strategy, its impact on IT efficiency, and its financial merit

•             Uses constant, predefined business-value criteria to provide a level comparison of multiple investment options

•             Provides criteria weighting that enables what-if analysis and rapid adjustment to changing business priorities

•             Displays results in a matrix that enhances comparative analysis of multiple investment opportunities

Advantages

              The disclosed method provides advantages, including:

•             Improved functionality due to providing a decision support tool and process for assessing and calculating the potential business value of an IT investment

•             Improved functionality due to enabling management to reassess the initial decisions at intervals to ensure the portfolio’s continued responsiveness to corporate strategy and the changing business environment

Detailed description

      The disclosed method is a business value index (BVI) that measures the factors that impact the value of an IT investment. BVI is a decision support tool that compares the relative value of IT investments. Proposed innovations and ideas are placed in a ranked list of investments most likely to provide the greatest value. BVI evaluates the investments along three vectors: the IT business value, the impact to IT efficiency, and the financial attractiveness of an investment. The tool weights the factors that affect the investment’s value and success based on on-going business strategy and the business environment. This approach enables an options-based approach to IT investments. To maximize the business value of an investment, BVI can be combined...