Top 5 Ways to Justify IT Investments

I’ve had moments when I was so excited about the potential of a new IT project that I couldn’t wait to get it started. And, after dedicating time to the procurement, RFP, review, negotiation and contract process, who wouldn’t look forward to doing the actual work? But, before you roll up your sleeves, there’s one more bit of planning to do. Take a step back and think a few years down the road – what impact will this investment have on your IT budget today and in the future?

According to IT analysts, today’s government IT directors must also be business managers. That is, they need to be ready to make the case for spending budget dollars. In the old days, we could say we bought this and that without question; but today, in the hyper-attentive world of government, we must answer much more fundamental questions:

• Why did you spend this money?
• What difference will your IT investment make?
• How will it improve government and increase constituent services?

Being able to measure and explain the impact of your IT investments will have on your organization’s operations is key to protecting your budget and getting support from managers and elected officials. So, how can you measure the impact of your investments and communicate it consistently and effectively to management?

Here are five ideas to keep in mind:

1. Baselines are important – Don’t let the excitement of starting a project prevent you from documenting what things are like before you fix them with your new IT solution. For example, if you’re implementing an enterprise content management (ECM) system, you must establish a baseline to show the impact your solution will provide. Cost considerations include the amount of money spent on paper, printing and storage as well as the time it takes staff to file, search and process documents. Estimates are okay, too. Include things like how long it takes to retrieve a paper document, the duration of phone calls when retrieving information and estimates of how often documents are lost. These are the real measures of what absorbs government budgets and staff time – time and money that could be better spent serving your constituents.
2. Ask your users – Establishing baselines is only the beginning. You also must talk with users in each department as you roll out your solution. Users know what takes up too much of their time and can identify the barriers they typically face. Their feedback will help you make the new solution more responsive to their needs and intuitive to use. Although most formal discovery processes involve some users, I believe ongoing discussions with user groups are essential. Include users at the start of configuration and continue through acceptance testing, refinements and expansions so you lay the groundwork for it to be effective for use every day.
3. Consider related effects – Early on, your solution might pay off in basic cost savings. However, it’s also important to take into account other benefits of you solution – such as reduced backlogs, the ability to conduct more inspections and caseworker interviews in a day as well as more constituent self-service opportunities like submitting electronic forms online. And, because digital documents can be accessed on tablets and smartphones, your field staff can be truly mobile and more effective, too.
4. The hard and soft – Sometimes, managers are told to calculate the return on investment (ROI) in hard costs (as mentioned in the baseline section) while others focus on the soft costs – i.e. the related effects of solutions. You should keep track of both. In government, constituent service can’t be measured in hard costs alone – sometimes, it’s the extra social service interview you complete each day that truly changes someone’s life for the better.
5. The annual report – The length of your counting period may vary, but your accountability should not. Every year, volunteering to educate your elected officials, managers and users about the progress and impact of your ECM solution assures that the value of the solution you are supporting and expanding is widely known, despite election cycles and changes in staff. Call it your annual report. Your persistence will help when you need to purchase, expand or even pay your solution’s maintenance bill each year.

It’s always been government’s responsibility to explain how and why they spend their constituents’ money. This isn’t always easy to figure out given the work government does, but it is essential. By doing so, you can justify why you invested in an IT solution to managers and elected officials and accurately convey the positive impact it’s had on staff and constituents, paving the way for future IT investments that will provide a consistent ROI.