Investment in Information Technology requires substantial financial resources as well as careful and comprehensive planning.

An important aspect of planning which plays an important role in the acceptance or rejection of a given IT project is Cost Benefit Analysis (CBA). It is a means by which decision makers and top administrative officials weigh the benefits against the cost of a given project. CBA is an important part of economic efficiency which focuses on quantitative information.

RoadMap for Cost Benefit Analysis of IT Investment

  • To conduct a successful cost Benefit analysis of IT Investments, it is imperative to understand the overall alignment of IT with business goals
  • Then appropriate Technology Management Strategy of the organization should be understood to ascertain the right fitment of the investments made. This would include a complete understanding of hardware, software, IT Service management and IT sourcing strategies
  • Analysis of Technology Management strategy can be complemented using standards and frameworks like COBIT, ITIL etc
  • Further, the output of Technology Management Strategy will become the input to Cost Benefit Analysis, which includes both quantitative and qualitative analysis using frameworks like Value Based Framework, Total Cost of Ownership, Total benefit of Ownership etc.