How to justify for the ROI of Enterprise Architecture - Part 2

How many ways can we justify for the Return of Investments for any projects?

This is in principle a business question. Do you know how much is your solution worth?

Contrary to common belief, the same solution is worth differently to different prospect. Solutions, unlike products, are meant to solve a set of challenges faced by the organizations. They cannot be treated as commodities because they are not. Every prospect has its own unique challenges, and therefore can only be addressed differently.

There are three different ways any solution can help an organization:
1. It helps the prospect generate revenue
2. It helps the prospect save cost
3. It helps the prospect to be compliant with statutory requirements

We, must first understand where our solution stand in these three categories.

A solution that helps the organization generate revenues is typically the easiest to sell. A projection of revenues vs the TCO will usually suffice. Take the recent Sport Betting case in Malaysia - it is something that will generate revenue for Ascot Sports and this system is sure to generate more revenue for the organization.

A solution that helps an organization optimize it resources can be justified by looking at how much cost it can save the organization in the long run. Most of the systems emphasizes on automation falls into this category. For example, a E-Form solution may help an organization shorten the processing of its application from 3 days to 30 minutes. An BPM solution typically falls into this category.

The third category of solution helps an organization to be compliant with the statutory regulations. If the law says so, you must do it. If the auditors ask for you, you must prove that you have the records. Some example of solutions are Record Management Solutions or Enterprise Content Management Solution fall into this category.

All these three type of solutions require an in depth planning to leverage on an Enterprise Architecture as all of them require the few characteristics in my earlier post - security, audit trail, business intelligence, etc. The most beautiful things about this is an established EA can be shared across many applications within an organization.

Is it easy to justify for ROI?

No - it requires in depth knowledge of the business and where the revenue is coming from.
Yes - it only requires in depth knowledge of the business and where the revenue is coming from.

More on this topic later.