1. Strategic Information Initiatives Week 2 Corporate Investment Decisions

2. 2 Agenda Kinds of initiatives The decision gauntlet Example internal decision processes Example budget cycle Perspectives on spending decisions

3. 3 Corporate Initiatives (examples) General business planning Mergers and Acquisitions (M&A) Internal policies and procedures Organization restructuring New products or services Competitive analysis Business turnaround Systems selection / implementation Enterprise data model (info?) Metrics Finance Metrics Forecasts Markets Models Research Data analysis

4. The Decision Gauntlet Internal project proposal process Budget cycle Funding source Competing priorities Competing investments Staffing constraints Strategic alignment Executive sponsorship Internal politics 4

5. Internal Decision Process [example from large insurance company] Project Oversight Committee Project proposal forms and guidelines –Cost benefit analysis –ROI analysis Quarterly submission deadlines Preliminary review process Ongoing status report requirements 5

6. Budget Cycle [example from software company] Annual budget approval for major spending Quarterly budget reviews and updates Strategic priority override process Funding limits by source –R&D (tax deductable) –Operations (expenses) –Capital (expenditures) 6

7. 7 Types of Spending Decisions Operations –funded by operating budget –routine decision making Investment –“special budget” category e.g.: capital, executive, planning or marketing –optional / compete with other investments

8. 8 Criteria for Investment Decision ROI Payback Risk levels Tie in w/ strategy TCO / TBO Value added Intangibles Internal politics Research (due diligence, SWOT) Who is accountable / sponsor Training stuff.... KPIs / timeframes Implementation plan Long/short term relevance Competition (market) Alternatives Budget / financial plan

9. 9 Portfolio Approach to Investments Investment categories –Product, service, brand development, internal operations, partnering Range of benefit time-frames –Short-term, mid-term, long-term Range of risk levels –Low, moderate, high ROI (return on investment) –High, medium, low

10. Investment Proposal Pipeline 10 Preliminary ideas Pre-proposal investigations Approved/pending proposals Approved/funded proposals Projects in process Projects completed

11. 11 Evaluation & Selection Investment proposal pipeline Portfolio balancing Funding pool Funding allocation Option rankings Funding selection cut-off points Recurring portfolio reviews Incremental funding, go/no-go decisions