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The Logic Behind an Investment

The big IT disasters tend to be the stories that hit the headlines: MYKI, LEAP, and the Department of Human Services systems are some examples from the Victorian State Government. Unfortunately the success stories and innovative ideas are overlooked by the press. One of the successes of the Victorian State Government has been the introduction of Investment Logic Mapping (ILM). This is a concept that was designed by Cranfield University to enable IT departments to link IT investments to business benefits. Money was being invested in IT projects that often failed to deliver the results that were most needed by the business. Using ILMs can fix that.

Initially the State Government used ILM to establish, in a very short time, whether it was even worthwhile for a Government department to spend time and money developing a funding proposal for an IT investment. The approach was very successful and saved millions of dollars – flaky projects were quickly identified and abandoned; sound projects were strengthened by the clear definition of what they would deliver. It quickly became apparent that the ILM tool was relevant to any proposed investment, not just IT. For example, the success enjoyed by the Victorian State Government led Christchurch in NZ to seek help to run ILM sessions to evaluate the hundreds of proposals for funds that resulted from the earthquake disaster.

Because our focus at Fenwick is to deliver business benefits rather than just software, we have taken an interest in ILM and have attended the courses and ILM sessions. ILM is simple but requires discipline. With the key people in a room for two hours with a good facilitator the group works through:

  1. Driver – What’s the Driver or reason behind the idea or proposal
  2. Actions – What needs to be done
  3. Benefits – What will be the benefits from taking action
  4. Enablers – Tools, Software etc., needed to make it happen
  5. Infrastructure – What infrastructure investment will be required

The outcome, quoting from is: A single-page depiction of the logic that underpins an investment. It represents an ‘agreed investment story’ that is created in an informed discussion. It is written in plain English in a way that will allow a layperson to understand the language and the concepts. It provides the core focus of an investment and is modified to reflect changes to the logic throughout its lifecycle.

We use the ILM concepts to help our thinking when we are seeking ways to ensure that the systems we implement deliver key business benefits and a sound return on investment.

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