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Top 10 Benefits of MS Sharepoint Services for document management

At my client site we have started using Microsoft Sharepoint services for the management of our business case and benefits related documents. So far this is working out great and I am really enjoying the collaborative benefits of this tool for document management. I recommend you look into it and perhaps even conduct a pilot in your group or department. From the Microsoft site, here are the top 10 benefits for sharepoint (good for the business case to justify the platform).

1. Improve team productivity with easy-to-use collaborative tools

Connect people with the information and resources they need. Users can create team workspaces, coordinate calendars, organize documents, and receive important notifications and updates through communication features including announcements and alerts, as well as the new templates for creating blogs and wikis. While mobile, users can take advantage of convenient offline synchronization capabilities.
2. Easily manage documents and help ensure integrity of content

With enhanced document management capabilities including the option to activate required document checkout before editing, the ability to view revisions to documents and restore to previous versions, and the control to set document- and item-level security, Windows SharePoint Services can help ensure the integrity of documents stored on team sites.
3. Get users up to speed quickly

User interface improvements in Windows SharePoint Services 3.0 include enhanced views and menus that simplify navigation within and among SharePoint sites. Integration with familiar productivity tools, including programs in the Microsoft Office system, makes it easy for users to get up to speed quickly. For example, users can create workspaces, post and edit documents, and view and update calendars on SharePoint sites, all while working within Microsoft Office system files and programs.
4. Deploy solutions tailored to your business processes

While standard workspaces in Windows SharePoint Services are easy to implement, organizations seeking a more customized deployment can get started quickly with application templates for addressing specific business processes or sets of tasks.
5. Build a collaboration environment quickly and easily

Easy to manage and easy to scale, Windows SharePoint Services enables IT departments to deploy a collaborative environment with minimal administrative time and effort, from simple, single-server configurations to more robust enterprise configurations. Because deployment settings can be flexibly changed, less pre-planning time is required and companies can get started even faster.
6. Reduce the complexity of securing business information

Windows SharePoint Services provides IT with advanced administrative controls for increasing the security of information resources, while decreasing cost and complexity associated with site provisioning, site management, and support. Take advantage of better controls for site life-cycle management, site memberships and permissions, and storage limits.
7. Provide sophisticated controls for securing company resources

IT departments can now set permissions as deep down as the document or item level, and site managers, teams, and other work groups can initiate self-service collaborative workspaces and tasks within these preset parameters. New features enable IT to set top-down policies for better content recovery and users, groups, and team workspace site administration.
8. Take file sharing to a new level with robust storage capabilities

Windows SharePoint Services supplies workspaces with document storage and retrieval features, including check-in/check-out functionality, version history, custom metadata, and customizable views. New features in Windows SharePoint Services include enhanced recycle bin functionality for easier recovery of content and improved backup and restoration.
9. Easily scale your collaboration solution to meet business needs

Quickly and easily manage and configure Windows SharePoint Services using a Web browser or command-line utilities. Manage server farms, servers, and sites using the Microsoft .NET Framework, which enables a variety of custom and third-party administration solution offerings.
10. Provide a cost-effective foundation for building Web-based applications

Windows SharePoint Services exposes a common framework for document management and collaboration from which flexible and scalable Web applications and Internet sites, specific to the needs of the organization, can be built. Integration with Microsoft Office SharePoint Server 2007 expands these capabilities further to offer enterprise-wide functionality for records management, search, workflows, portals, personalized sites, and more.


Who owns the business case and benefits management process?

Ownership of the business case process, templates, and guidelines is the critical factor in a firm's investment decision-making. The IT steering committee, comprised of IT and business execs, should own the business case process and standards. The business via its enterprise project management office (EPMO) — or by default, the IT PMO if there is no EPMO — should manage the process, moving the business case through the steps of its development journey within the firm, all the way through to sign-offs by stakeholders and the steering committee's decisions. Why the PMO? Best practices show that a significant role of the PMO is the standardization of IT-related processes, tools, and methodologies across the business — one of which should be the business case process. And business case creation skills may exist in a PMO center of expertise, with its unique, unbiased, cross-functional view of the firm. What does "owning the business case process" mean? PMOs that step up to the process  ownership role will:
· Create a collaborative environment to develop the standards. Business cases stall when the stakeholders aren't committed to the process and the framework. The reason: Stakeholders won't
participate without the consultation, input, and feedback necessary to generate buy-in and their own sense of ownership.
· Get the sign-offs. A business case can be thought of as a set of predictions — and each business case prediction must have a sponsor. Predictions without commitment have no credibility
with decision-makers. Signing on the dotted line gives a business case teeth and identifies a commitment to review success or failure post-project.
· Use business case best practices. Follow a standardized template with a consistent table of contents. Quality business cases are living documents for the expected life of the investment and
form the basis for extracting full value past project implementation.
· Own the process, not the content. Be clear about that. PMOs should not get sucked into being a misplaced proxy for another business case element owner. Instead, PMOs manage the process
by which project requests are evaluated and initiated.

Source: Forrester Research,

Pros and Cons of NPV, IRR and Payback calculations

Net Present Value (NPV), Internal Rate of Return (IRR) and Payback Period are some of the most common metrics used in the calculations of quantified benefits and costs when justifying projects via business cases. Here I take a quick look at each one and the pro's of con's of using these metrics.

Net Present Value (NPV)

Description - Perhaps the mostly widely used technique for analyzing a potential investment opportunity or project is the net present value of cash flow or NPV approach. Using the NPV of cash flow technique we would discount all cash flows in our business case at the opportunity cost of capital - in most cases the weighted average cost of capital for a company. The business rule that is applied with this analysis is to accept all projects or investments where the NPV of cash flows is greater than zero - so we're looking for positive NPVs.NPV compares the value of a dollar today to the value of that same dollar in the future, taking inflation and returns into account. If the NPV of a project is positive, it should be accepted. However, if NPV is negative, the project should probably be rejected because cash flows will also be negative.

Pros - Accounts for the fact that the value of a dollar today is more than the value of a dollar received a year from now - that's the time value of money concept. The other strength of this measure is that it recognizes the risk associated with future cash flow - it's less certain

Cons - Does not give visibility into how long a project will take to generate a positive NPV due to the calculations simplicity. Our NPV rule tells us to accept all investments where the NPV is greater than zero. However, the measure doesn't tell us when a positive NPV is achieved. Does it happen in five years or 15? If at all. Another limitation of the NPV approach is that the model assumes that capital is abundant - that is there is no capital rationing. If resources are scarce, then the analyst has to look carefully at not just the NPV for each project they are evaluating, but also the size of the investment itself. Fortunately, there is another measure that can help overcome this weakness - the calculation of internal rates of return.

Internal Rate of Return (IRR)

Description - The internal rate of return, or discounted cash flow rate of return, offers analysts a way to quantify the rate of return provided by the investment. The internal rate of return is defined as the discount rate where the NPV of cash flows are equal to zero. The IRR can be calculated using trial and error (changing the discount rate until the NPV = 0). Generally speaking, the higher a project's internal rate of return (assuming the NPV is greater than zero), the more desirable it is to undertake the project. The rule with respect to capital budgeting or when evaluating a project is to accept all investments where the IRR is greater than the opportunity cost of capital. Under most conditions, the opportunity cost of capital is equal to the company's weighed average cost of capital (WACC).

Pros - It is widely accepted in the financial community as a quantified measure of return and it's also based on discounted cash flows - so accounts for the time value of money. And when used properly, the measure provides excellent guidance on a project's value and associated risk,

Cons - There are three well known pitfalls of using IRR that are worth discussing:
1. Multiple or no Rates of Return - if you're evaluating a project that has more than one change in sign for the cash flow stream, then the project may have multiple IRRs or no IRR at all.
2. Changes in Discount Rates - the IRR rule tells us to accept projects where the IRR is greater than the opportunity cost of capital or WACC. But if this discount rate changes each year then it's impossible to make this comparison.
3. IRRs Do Not Add Up - one of the strengths of the NPV approach is that if you need to add one project to an existing project you can simply add the NPVs together to evaluate the entire project. IRRs on the other hand cannot be added together so projects must be combined or evaluated on an incremental basis.

Payback Period

Description Payback allows us to see how rapidly a project returns the initial investment back to the company. In practice, companies establish "rules" around payback when evaluating a project. For example, a company might decide that all projects need to have a payback of less than five years. This is also referred to as the cutoff period.

Pros - Allows for an easy understanding by management and stakeholders of when the initial investment will be recouped. This allows go, no-go, decisions to be made based on simple cutoff date rules.

Cons - Does not take into account the time value of money. Discounted cash flow should be the preferred way to evaluate payback since it does recognize the time value of money. That is cash in the future is not worth as much as much as cash today. Payback period also ignores all cash flows that occur after the payback period is reached.

Related Posts:
Payback Period
- NPV Definition and Sample Spreadsheets
- Parts of this article were sourced from a detailed analysis of the above at Money - Zine. For a detailed template covering the above click here to visit the site.


Rules for effective benefit realization

Saw a great article recently summarizing the need and framework for benefits realization. Here are some highlights and key points:

For most companies IT is a significant component of capital spending—typically between 50%-75%. For the vast majority, more than 70% of this is in fixed costs, and when you take into account the prior year "carry over" spending, and depreciation, a very small percentage of IT spending in a given year may be creating real value for the company (and that's assuming that those initiatives are successful). Now consider this scary fact from survey and interview research we've done over the past decade: Fewer than 12% of companies can accurately measure the business impact of their IT investments

Benefit realization is about the proactive forecasting, management and measurement of financial, operational and strategic benefits being realized. It's about driving accountability for IT results across the organization. And it's in this role where the CIO can be the greatest advocate and most effective. Most companies either have little or no benefit realization in the critical areas, or they have too many processes and artifacts, and in turn, are viewed as overly bureaucratic, draconian, and non-value add.

Here are a few rules to live by for effective benefit realization:

1. Start Building Selectively:
- Pilot with a particular business unit and set of initiatives.

2. Secure Business Co-Ownership:
- Ensure senior leaders collaborate in selecting IT measurements.
- Work with corporate finance for their input and support.

3. Recalibrate Benefit Measures
- Regularly review and adjust performance measurements being used (yearly) to prevent them from getting stale or obsolete.

4. Demand Business Accountability For Funding And Delivering IT Results.
- If the business is unwilling to have the benefits be incremental to their operating plan, that's a red flag.

5. Be Selective With Benefit Realization Metrics
- Focus on a select few performance measures and take great care not to dilute the need for focus with too many measures.
- Strong CIOs are relentless about determining what results truly matter.

6. Give Yourself and Others a Break
- Do not use the same level of measurement and process rigor on all initiatives as you'll risk killing the effort with bureaucracy.

7. Use A Business Performance Language
- Use metrics that are business-relevant and matter to key stakeholders.
- Ensure measures are speaking to stakeholder interests.
- Take care to not use the same benefit lens across the entire IT landscape (e.g., infrastructure spend is different than new business applications).

8. Measure the Benefits of the Benefit Realization Process Itself
- Done well, this should yield improvement in key areas such as improved ROIC (return on invested capital); and reduced variance of planned to actual costs and benefits.

The bottom line " benefit realization practices are not cookie-cutter. Rather, they are a specific set of processes, methodology, a toolkit, and most of all, a journey. Successful ones are very context-driven and take into account the organization's culture and management style. Don't wait to have everything thought through to perfection " it won't ever be. And most important, make such capabilities part of the organizational DNA, rather than an effort that is a reaction to down or tough times.

The full article "Rules To Live By: Benefit Realization - Improving the Yield on IT " by Amir Hartman can be found here. If you are or planning to work in this area, I highly recommend reading the entire article.


Become expert at benefits realization

A nice summary from Forrester Research to becoming an expert at benefits realization. The full article can be found at their website.

IT should take the initiative to help process owners confidently estimate project benefits and give them the tools within the business case to know when the benefits are not achieved and how to go about benefits remediation. IT should:

- Develop expertise in project benefits management. Promulgate the expertise across the firm. Get to be known as the experts in business case benefits management and benefits workshop facilitation. These skills will become indispensable.

- Standardize on a benefits estimation process. Use the same process repeatedly for the benefits calculations to derive the benefit of continuous improvement based on experience.

- Ensure clarity around assumptions. Business case benefits are predictions. These predictions are based on future events that may not unfold exactly as forecasted. Treat assumptions as risks — the risks associated with benefits realization. And be sure that these assumptions are provided, and supported, by the business process owners.


You Need Portfolio Management if …

  • You can't identify your IT expenses to provide the foundation for calculating return on investment (ROI)
  • You  base your IT investment decisions on intuition instead of facts
  • You can't tie your IT asset management system to your financial system
  • You don't know how, or if, you will save money by consolidating legacy networks
  • You can't find $100K for an initiative that will save you $6M


Project Funding Process and Control

Interesting times for me right now on the current client I am with. I am working for the finance division looking at the funding process for projects. However, the technology (CIO) group has suggested their own process for this and currently both organizations are fighting over who will have control over the project funding and selection process. I have been on both sides of the fence before and its interesting to see how political this is getting, rather than focusing on the underlying principle of what is the simplest process that will bring the best return on investment and benefits for the organization. I see this time and again at big organizations and I guess this is what creates more work for me!

Your thoughts on this?