Why Is Integrated Management More Necessary Than Ever?
For businesses to function effectively in the current era of massive market competition, it’s essential that they actively utilize the best, most...
For any business process, being able to determine the return on investment (ROI) can be crucial. Money spent on IT solutions and project management is no exception. Tracking IT spend—such as money spent on IT project management salary, tools, and software—is a critical part of determining ROI for IT.
Aside from determining ROI, it’s important to find ways to optimize IT project management processes to improve productivity and results for the whole organization. How can you keep track of your IT project management? What are the benefits of tracking IT spend? How can you use data to improve IT project management?
IT project management is a kind of catch-all term for the processes and procedures an organization uses to plan, organize, and implement IT initiatives to achieve specific business goals.
The goal of different methods of IT project management is (usually) to help make project work more consistent and timely while minimizing “scope creep” and budget overruns.
There are many different examples of IT project management methodologies that businesses can use, such as:
You may not need a Master’s in IT project management to get the gist of any of the above examples. However, many people spend years pursuing IT project management degrees or business management degrees where they take IT project management courses (and other business-related classes) to master the art of picking and implementing the right methodology for the right project.
Now that we know a bit about the different types of IT project management methods, how can a business keep track of its IT project ROI?
The traditional formula for calculating ROI for any given project requires a project manager to know:
These factors are immensely useful for calculating the total real cost of an IT project and measuring its impact on the business after completion.
However, it can be difficult to establish a precise ROI for IT project management tools and processes because they don’t always affect the “bottom line” directly. The ROI for IT improvements may not be monetary like they would be for the release of a new product. Instead, ROI may come in the form of improved efficiency for specific tasks or the elimination of certain roadblocks to productivity. So, the ROI formula would need to be tweaked to match the specific goals of the project and show how those goals provide a return for the business.
For example, let’s say that the goal for one IT project is to make a specific process more efficient by developing some new software. If labor on that task is equal to $15 an hour, with 100 people working on that task for an hour each week, the pre-project cost of that task is $1,500/week. If an IT project to improve that process with new software costs $10,000 and improves efficiency by 10% (saving employees six minutes a week), then $150/week is saved.
In this example, it would take over 66 weeks for the IT project to provide enough time and labor savings to pay for itself. However, it’s important to note that this is an oversimplified calculation—it doesn’t take into account the added productivity of those 100 employees from saving that small amount of time, individual variances in productivity, or other potential add-on effects of a change in IT.
So, why would a company want to track its spending on IT projects and project management software/tools? Some potential benefits of tracking IT spend and gathering data about IT project management processes include:
The final benefit in the above bullet list is especially important for managing IT project management spend and maximizing ROI in the long term. However, data collection requires having the right tools for gaining insights into IT projects and their management.
Why is having data so important to better IT performance? Consider this hypothetical example of two companies:
Company A and Company B are both in the same industry, are of a similar size, and are direct competitors in the same markets. Both companies decide to launch several new IT projects to improve their services and make internal workflows faster and more consistent.
However, before launching their new IT projects, Company A decides to implement an IT project management software solution that can help them track critical data about their IT projects. Company B decides to simply implement all of their planned projects without making any modifications.
After the first IT project goes a bit off the rails (taking up more time and money than originally planned) for both companies, there’s an internal review. Company A, with its data collection solution, is able to diagnose the problem effectively—introducing a minor change to their IT project management methods to solve an issue that was making the project team miss deadlines and consume more resources. Company B simply slashed the budget for their other projects without making additional changes to account for the problem.
With one simple change, Company A was able to make all of their subsequent IT projects run more smoothly—keeping them on-time and on-budget while more accurately tracking what was going on and accumulating data that could be useful for further IT optimizations.
Company B, on the other hand, kept running into cost overruns for all subsequent IT projects. When they cut project staffing to reduce costs, their IT projects simply ended up getting delayed—putting off any potential IT ROI for months. Had they gotten the data they needed to make more meaningful, business-minded IT decisions, they could have avoided breaking the budget.
Having the right IT project management skills and tools should never be underestimated. However, not every business can realistically afford to hire extensively for IT project management jobs, provide IT project management training, find all of the tools and software they need, and make everything work as part of a cohesive business process. This is where an outsourced IT project management service can help.
Systems X can provide the IT project management templates, tools, and skills that businesses need to track their IT project ROI and simplify IT change management. Our proactive IT management approach focuses on:
Need help with your IT project management now? Reach out to Systems X today to get started!
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