Wednesday, May 23, 2012

Cumulative value of an IT project

Organisations constantly face the question whether they should execute a project now or defer it to later. One of the aspects that should be considered is the cumulative value of the solution over time.

Certain systems grow in value over time such as an effectively implemented SharePoint system for communication, collaboration and document management. The combined value can be an effective knowledge management solution. Effectively used knowledge stimulates the creation of more knowledge and this facilitates growth of the organisation.

Other systems and technologies have more or less a constant value over time. Take for example a communication system. Say you have a variety of solutions for voice communication and have the option to implement a Voice over IP (VOIP) solution. Though you can achieve cost savings with the VOIP solution and potentially make certain tasks easier for the user, the value today of this will be the same tomorrow. Without VOIP you still can make phone calls. Say, if the value of the solution is today 10, then tomorrow it will still be 10 and again the day after it will still be 10.


However, with a knowledge management solution the value of the system grows with the amount of knowledge accumulated in the system.The more knowledge you collect in the system, the more people will consult the solution to make decisions. The more it is used, the more effort people will put in it to record their knowledge. So if the value is today 10, tomorrow it will be 15 and the day after 22.5.

As you can see, the decision to defer the implementation, upgrade or improvement of your knowledge management solution has over time a significantly bigger impact than the VOIP example given earlier.

Knowledge not recorded today might be knowledge lost forever. That is why I think SharePoint implementations or improvements have an urgency factor to be considered. The longer you wait, the bigger the knowledge gap.

Of course the decision to execute a certain project needs to consider multiple factors such as total cost, ease of execution, risk, alignment with strategies and many more. However, I found that it is often difficult to explain why a SharePoint implementation, upgrade or improvement project is necessary and this is one of the arguments that can help with building the business case.

Knowledge is a business critical asset that requires nurturing to achieve competitive advantage. Knowledge creation facilitates economic growth.

Besides that knowledge can be stored as content in a system, for example in a document stored in a SharePoint site, knowledge can be incorporated in the business logic of a business application. In this case the incorporated knowledge does stimulate further growth of knowledge but it assures consistent execution of tasks and has the benefit that processes and procedures are enforced. When staff change, the system will still be there to assist with correct execution of the tasks. You have moved some of the smarts from the people into the systems. See also this blog post about my view on making information flow.







No comments:

Post a Comment

You are welcome to leave any response or thoughts that you have as feedback.