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Return on Investment / Total Cost of Ownership- WebQuest | Facts | Issues | Authorities | Conclusion | Home | To properly manage an IT project, it is necessary to estimate the return on the investment (ROI) in that project and its total cost of ownership (TCO), over the project's entire life cycle. First, ROI/TCO are important in the selection process because most organizations have budget constraints and must choose the IT investments that best help them effectively and efficiently fulfill their missions. Second, they are important for controlling the project's costs over its life cycle. Finally, ROI/TCO provide benchmarks that help assess the project's success with respect to the costs and benefits that are actually realized. These concepts are just as controversial as they are important. As you will discover from this exercise, it is difficult to identify and estimate all of the tangible and intangible benefits and costs of any IT project. Many people would use that difficulty as a defense for not calculating ROI or TCO. Good accounting professionals never use the difficulty of the calculations as a defense. Go to the Issues page. |
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