Financial Review of Improvement Projects in Technology

Are you working with systems development? Now imagine a situation where you have an idea to propose improvements for your organization. For example, you believe that a change in methodologies for developing or improving processes or refactoring legacy versus complete reconstruction of a system can provide gain for your organization. You have a good sense, from the technician standpoint, of what steps you should follow to get there. However, there's only one problem: you do not know how to quantify the costs, earnings, rate of return, net present value and other relevant financial information that are often used as a basis for making investment decisions.

In many organizations, especially in large and complex, it is necessary to make a financial assessment of potential projects, especially those that require more investment. This financial review answers the following question: When considering the risks, it is worth investing in this project? Finally, this type of financial information also helps in project prioritization decisions. Generally, Projects that generate more value to the organization are prioritized.

The concepts and tools for valuing assets (projects are a particular case of assets) compose a broad arsenal and can be relatively sophisticated (when we use the theory of options for example). However, we believe that the mastery of certain fundamental valuation concepts and dynamic project portfolio of technology can be very useful for most technology professionals quantify a broad spectrum of proposed improvements including a financial foundation that help them to "sell" their ideas to organizations.

Course Objectives:

This course aims to enable students to understand and use a generic framework for financial evaluation of projects for improvement in technology.

  • Basic concepts and examples of evaluation (pricing) of assets.
  • Paradigm Risk Vs. return.
  • Measuring the benefits of technology projects.
  • Measurement of risks: as anti-value.
  • Free risk rate, premiums and financing costs of the organization.
  • Modeling project portfolios: what is financially relevant?
  • Simulation of project portfolios via monte carlo simulation (SMC).
  • How to design, critique and defend assumptions of the evaluation model.
  • Approaches to valuation (pricing) project.
  • Presentation of individual case studies of improvements.
  • Evaluation of benefits in complex contexts of project portfolios and introducing independent concurrent improvements.
  • Consolidation of the evaluation framework based on Monte Carlo simulation (SMC).
  • Investment in stages: the tactic of "guerrilla" with proofs of concept (POCs).
  • Some tips to executive presentations: preparation and presentation techniques.
  • Through dynamic presentation with cases proposed by the students in a "Value Review Committee" composed of experts and professional teachers.