535Lect1 - IS/PM 535 IT Investment Financial Analysis...

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1 S. Chan IS/PM 535 IT Investment Financial Analysis 1 IS/PM 535 IT Investment Financial Analysis Lecture 1 Introduction to IT Investment Decision Making S. Chan IS/PM 535 IT Investment Financial Analysis 2 Agenda Course overview IT investment and cost management decision making Cost-benefit analysis as a framework Enterprise IT spending vs. IT department budget
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2 S. Chan IS/PM 535 IT Investment Financial Analysis 3 I. Course Overview Objectives Apply financial analysis and decision-making approaches to aid IT investment decision making at the operational, project, tactical and strategic levels. Basic and advanced financial methods Multi-criterion decision methods Prerequisites: advanced standing for non-PM majors All readings and handouts are provided on COL website. S. Chan IS/PM 535 IT Investment Financial Analysis 4 Course Overview Assignments (35%) 6 assignments -- submit online by 5:45 p.m. and review solutions in class on the due day. No late submission will be accepted (late=0 point). Typed or scanned hand-written answers (with clear hand writing). Drop the lowest assignment score. Midterm exam (30%; closed book) in week 6 (lectures week 1 – week 5) Final exam (35%; closed book) in week 11 Final course grade will be based on adjusted weight of scores. Observe University Policy on Academic Integrity . (plagiarism = 0 point) Correct e-mail address. Lecture notes and supplementary readings and worksheets will be sent via email or posted on COL web. Take good notes during lectures . Use notations and formula defined in class. Manage your personal/work schedule. \
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3 S. Chan IS/PM 535 IT Investment Financial Analysis 5 Course Topics 1. IT cost management IT cost management – supply and demand perspectives Responsibility center: cost centers, profit centers, investment centers 2. IT operational financial management and evaluation IT department/service cost management: cost classification and cost behavior IT department/service financial viability planning, balancing revenues and costs, cost-volume-profit analysis and profit planning S. Chan IS/PM 535 IT Investment Financial Analysis 6 Course Topics 3. IT capital investment decision making IT financial analysis (I): projecting revenues and expenses, calculating payback period and ARR IT financial analysis (ll): identifying and estimating cash flows over the life cycle of an IT investment: NPV and IRR Cost-benefit analysis for multiple IT alternatives: make, buy or lease 4. Additional tools for IT management decision making Critical success factors, balanced scorecard; investment portfolio analysis, value and risk analysis
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4 S. Chan IS/PM 535 IT Investment Financial Analysis 7 II. IT Investment and Cost Management Decision Making S. Chan IS/PM 535 IT Investment Financial Analysis 8 Complexity in IT decision-making problems: PC selection criteria and measures
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535Lect1 - IS/PM 535 IT Investment Financial Analysis...

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