What is IT Investment Evaluation?
IT investment evaluation, told as a story about answering a sponsor in numbers once the tour is over.
The sponsor paid a lot, and once the show's over, nobody knows if that money paid off.This tour company IS the IT project organization.
"The audience loved it" alone can't convince the sponsor.Audience reactions aren't enough — results have to be shown in money and numbers.
IT investment evaluation is a scorecard for the show, written in money and numbers afterward.Checking, in numbers, whether the investment paid off.
Investment evaluation looks at ROI, NPV, BSC, and qualitative gains together.Weigh the numbers together with intangibles like brand and reputation.
Some investment gains can't be captured by a number alone.Things like fan loyalty don't fit one number — but the evaluation still tracks them separately.
IT investment evaluation = after the project (show) ends, checking — in both numbers and intangibles — whether the investment paid off.
IT investment evaluation measures financial metrics like ROI and NPV, the four BSC perspectives (financial, customer, internal process, learning & growth), and qualitative effects like brand value, together, to judge whether an investment was worthwhile. This page centers on checking results after the investment, but the same metrics also serve feasibility reviews before it.
When grown-ups say it
- ROI
- The ratio of net gain to money invested. A widely used baseline metric.
- NPV
- Future earnings in today's value, minus the money invested. Reflects how money's value changes over time.
- Balanced Scorecard
- A scorecard viewed from four angles: finance, audience, ops, growth. Keeps you from leaning on just one number.
- Qualitative Benefit
- Value like fan loyalty that doesn't fit a number. Not ignored — tracked separately instead.
- Project Risk Mgmt
- The umbrella that prepares for show-day weather. Risk is weighed before the investment decision too. → the umbrella for surprises
- Ops Performance Mgmt
- Measuring system uptime and latency after the show too. Evaluation keeps happening through the operations stage too. → the ops room after the show
- IS Audit/PMO
- Checks the project as a third party (audit) or supports its management (PMO). Covered in depth on another page (the publishing-house story). → the checker who watches the whole publishing run
- Negotiation & Contract
- Writing terms into the performance contract. Contract terms change what the investment costs and returns. → tuning terms until both sign