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KMWorld licenses Web-based applets to help managers model the business case--free

This article appears in the issue December 1998 [Volume 7, Issue 13]

Modeling ROI in five minutes

Knowledge management projects using document imaging, management and workflow can now be ROI-modeled online. A new KMWorld Web-based service provides software applications project planners and decision makers with the ability to reliably develop the business case for buying KM-related software with free, five-minute online applets.

Called CIOView and licensed to KMWorld from developer Avantsoft (www.avant-soft.com) for KM-related applications, the Web-based analyzers will lessen uncertainty associated with adopting new technologies and help IS and business-line decision makers ensure that their organizations get the greatest benefit from their IT purchases.

Helping planners make better cost- and ROI-justified buying decisions has a direct impact on shortening the buying cycle.

We now live in an IT purchasing world where ever-tighter business cases and solid ROI models are market requirements for any IT spending. But it's now particularly acute in the imaging, document management and workflow segments of the knowledge management space.

Why?

  • The case hasn't yet been made for moving KM-related applications from nice-to-have to need-to-have.

  • IS managers aren't convinced that with the current products on the market, they should buy rather than build.

  • More case studies need to demonstrate ROI.

As Y2K crises and Euro conversion projects begin to tail off, growth in IT spending will also slow. An inevitable slowdown in the U.S. economy as it responds to global events will add to the pressure on IS departments.

KMWorld's recent attitudes survey clearly placed top management buy-in or mandate for KM-related projects as, by far, the most important factor to success of a project. Such buy-in demands line managers and CIOs to make the ROI case.

In the past, ROI in the 15% to 18% range could get approvals. Get ready for a world where 20% ROI requirements will be de rigueur as part of corporate efforts to reign in spending and alter the focus of IT spending. Proposals promising less will die or the planning/purchasing cycle will drag on forever.

Alluded to above is the new market reality that not only does executive management now require IS to have a vocabulary for and alignment with business objectives, but increasingly CIOs will be asked to take the focus off cost savings and to enhance or even create revenue generation opportunity.

KM and related technologies ought to win, if the business case, the ROI and the new-business opportunity and innovation stories are told.

Providing information that can help to shorten the buying cycle, to the benefit of both buyers and sellers, is a core value of KMWorld.

CIOView Web applets are intended for planners to rapidly sift through a number of different IT options for imaging, document management and workflow and to quickly get a handle on what approximate costs and financial benefits will be. They then can use those first-cut results in preliminary project plans and RFPs.

The point of the new service to readers is to help them make faster, better justified recommendations and purchase decisions. CIOView is a business analysis tool that allows purchasers to:

  • determine costs of new IT initiatives,

  • understand the benefits of the investment,

  • automatically obtain the ROI, internal rate of return, payback period and net present value (NPV).

The analysis also gives users a percentage breakdown of likely expenditures plus detailed assessment of where they will obtain financial benefits.

The format of Avantsoft's applets allows decision makers to measure financial impact of a new IT project without requiring formal understanding of finance or any in-depth experience with the product or technology being evaluated.

The Web applets offer users the ability to quantify the impact of their IT decisions in five-minute formats derived from Avantsoft's robust line of comprehensive tools, which model additional elements such as sophisticated "what-if" capabilities, variable roll-out schedules and changes in financial assumptions.

After completing the five-minute analyses, readers have the opportunity to consider registering to use the full, comprehensive analyzer ($500).

In addition to the generic analyzers, several specific applets allow users to measure the likely financial impact of specific vendor solutions. Several market leader applications are now live on the KMWorld site at www.kmworld.com. Additional applets will become available in the future.

Avantsoft provides decision support tools for assessing planned software implementations. The company sources data from International Data Corp. (www.idc.com) for many of its products, and its consultants have completed several hundred on-site case studies.


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