SeaQuation Reduce
Reduce IT investment costs by 10%,
while maintaining current benefits output.
SeaQuation approaches the prospect of reducing IT investment costs by defining the present value of all IT projects leveraging our intellectual property, metrics and tools based on the new enterprise value governance framework, Val IT.
SeaQuation uses a variety of methods to calculate the value of your portfolio.
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Non-financial benefits are taken into account, including mandatory, continuity and discretionary projects.
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Risk adapted benefits are used to calculate the total financial value of the IT projects portfolio.
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The list of projects is then ranked based on the calculated risk-adjusted Internal Rate of Return and Net Present Value of the projects.
We are thus able to deduce the current Net Present Value of the entire portfolio.
After calculating the NPV of the project portfolio, 20% of the lowest performing projects are selected. If mandatory projects are included in the lowest 20%, we will evaluate whether they are indeed necessary, or search for cost-effective solutions.
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When considering discretionary project the portfolio is divided into four categories: transactional, informational, strategic, infrastructure
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In each category the lowest performing projects are reassessed and candidates are identified for possible rejection.
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The implications of the possible rejections are analyzed to make sure that projects are not intertwined or dependent on each other.
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SeaQuation evaluates and determines how to minimize negative consequences of project elimination (if any).
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We then create new combinations from the rejected projects and determine their financial and non-financial benefits.
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Based on this benefits analysis we prioritize the new combinations and select the top 8%.
By adding the top 8% of these projects back into the original portfolio, the total IT investment costs for the next year will be reduced by 10%
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Project costs decline by 12%
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2% analysis cost included.
The total risk adjusted value of the new portfolio will be equal or slightly higher than the original value. The new portfolio will be the base for project proposals in the future, or the 10% savings can be re-allocated to new projects with higher value projections.
