The Effective Measurement and Management of IT Costs and Benefits

There are not many books on evaluating of IT costs and benefits. Especially when you like a certain amount of quantification and practice advice. The text proposes various methods how to evaluate IT investment (not only on money basis). On first look it looks as valuable material however I will can confirm this opinion after possible (I hope) application.

I thought this book was very well written and easy to understand, it went well with the college class.

I got this book amongst other related ones, for a management learning project I participate in. My background in formal evaluation of IT projects is essentially zero. This book is to date the best I got on the subject, it's clear, well organized and conveys actually insight in the matter. I rate a book useful when it makes me better understand the matter, and provokes thoughts I wouldn't have made without it. Other books I got on the subject are either just storytelling, or overpractical "bullet-proof methods" to something. I'm glad I bought this book.

For years I have been searching for the "right" method with which to measure IT costs and benefits. In my quest I have come close with a few well-written white papers that fell short because they didn't go deep enough. This book ends my quest - finally, I have found the "right" method.The authors start with a chapter on the elusive nature of IT benefits, and the difficulties of measuring and managing them. This chapter lays the groundwork for the rest of the book. One nugget of valuable information given here is the recommendation that IT be run based on P & L (profit and loss). Because IT is traditionally operated as a cost center instead of a profit center I first thought that this was overly radical. However, as I dug deeper I understood the true intent: to tie together investment, value and economics, and measure IT investments based on their derived value to the business. This is where profit comes in. It initially looked like thinly disguised cost/benefit, but the expansion of this concept as the book unfolds makes it look like a true P & L approach.Chapter two focuses on reasons to evaluate IT investments, and gives a number of approaches to perform evaluations. It covers the strengths and weaknesses of each approach and also discusses some of the pitfalls of benefit evaluation. This material segues into chapter three, which covers the investment decision process. The authors did a good job of explaining this from an IT perspective, and ties it closely to meeting business requirements.The next chapter discusses the issues associated with, and the techniques used, to perform the IT evaluation. This is where the book gets interesting and a coherent method for measuring IT costs takes shape. What I liked most about this chapter is the list of possible techniques you can employ and how the authors classified techniques based on relative strengths such as objective vs. subjective, etc. This allows you to select the best approach based on the degree of precision you are willing to accept and your goals. Chapter five, identification of IT costs, is about what we all struggle with: identifying total costs of ownership, finding the "buckets" into with to place the costs, and the cost drivers themselves. The costs are divided into direct and indirect cost portfolios, and the cost breakdowns for each portfolio are comprehensive. This material is valuable and will lend itself nicely to a number of approaches, among them activity-based cost management. Chapter six, IT Cost Control, shows you how to manage the costs that you identify and is a good primer on IT budget management for those who find themselves in a new management position.IT Business Case Accounting, the topic in chapter seven, presents a straightforward approach to building your business case for IT investments. This is "must" reading for IT management and consultants. Chapter eight, Risk Analysis, is standard fare if you are familiar with these techniques. It is covered