A tangible benefit can be measured and expressed in financial terms.

9.1.2 Change impact analysis

Every proposed change must be analyzed to determine if the change should be authorized and incorporated into the development framework. Prior to conducting a detailed impact assessment, the criticality of the proposed change must be established. The critical nature of a proposed change should indicate the necessity of the change from the perspective of software operational suitability. Table 9.1 identifies common industry levels of criticality associated with standard configuration management engineering change proposal priority codes. These criticality levels are intended to establish the relative merits of a change proposal that may improve the return on investment to the enterprise. The decision to initiate a change impact assessment should be based on the perceived importance of the proposed change to stakeholders.

Table 9.1. Alignment of Software Change Proposal Criticality Levels

Configuration Management-based Engineering Change Proposal [ECP]Priority CodesProposed Software Change Proposal Criticality Levels

Emergency: To affect a change in operational characteristics that, if not accomplished without delay, may seriously compromise national security.

To correct a hazardous condition that may result in fatal or serious injury to personnel or in extensive damage or destruction of equipment.

Emergency: To affect a change in operational characteristics that, if not implemented without delay, will seriously compromise stakeholder operational effectiveness.

To correct an unsafe operational situation that may result in serious injury to personnel or in extensive damage or destruction of equipment.

Urgent: To affect a change that, if not accomplished expeditiously, may seriously compromise mission effectiveness of equipment, software, or forces.

To correct a potentially hazardous condition that could result in injury to personnel or damage to equipment.

To meet significant contractual requirements.

Essential: To affect a change that, if not implemented, may seriously compromise operational effectiveness of equipment, software, or operational processes.

Decisive: To affect a change that may be significant to expanding product attractiveness to potential clientele.

Compliance: To meet contractual or agreement requirements.

Routine: When emergency or urgent implementation is not applicable, required, or justified.

Constructive: To affect a change that, if not implemented, may be disadvantageous to product feasibility or may be advantageous to expanding product attractiveness to potential clientele.

Subjective: To affect a change that favors one or more stakeholders’ operational processes,

A change impact assessment is a technical cost-benefit analysis where cost addresses the work packages necessary to incorporate the change, while the benefits are those perceived advantages to stakeholders. Intangible benefits may be hard to quantify, but future business opportunities, technical experience, and proficiency gained by undertaking the new requirement and influence on the enterprise reputation all constitute perceived advantages. A change impact assessment involves the following steps:

Change network analysis. Identification of the related technical tasks that will be affected by the requirement change. The related technical tasks affected by a change to an existing requirement can be identified relatively simply if the requirements traceability associations have been thoroughly identified and maintained. New requirements will need to establish these traceability associations to identify the related tasks that must be assessed to determine the impact of a proposed change on the technical plan. New requirements may instigate the inclusion of additional tasks to the work plan. This includes any rework necessary to incorporate a change into the software architecture, documentation, and technical plans [especially the software implementation and testing plans].

Conflict assessment. Identification of other requirements that may be in conflict with the proposed change. Requirements may impose inconsistent, divergent, or contradictory design objectives that must be resolved before the requirements can be specified. This adjustment to conflicting requirements will impose additional rework of technical tasks and progress recession.

Solution feasibility. The ability to establish an architectural solution that satisfies the proposed change and associated conflicting design objectives may introduce additional risks to the achievement of project objectives. This typically results in establishing an architectural design that achieves an acceptable compromise among conflicting design objectives. Trade-off analysis and risk assessment of design alternatives is essential to deriving a feasible and highly advantageous design solution.

Solution cost appraisal. Identification of the anticipated cost of incorporating the proposed change to the work plan. This includes the modification of existing work packages and inclusion of additional work packages to the work plan. The solution cost appraisal should identify the change in resources required to accomplish the change proposal, as well as modifications to task scheduling and milestone achievement.

Perceived benefit appraisal. Identification of the anticipated benefits derived from the authorization of the proposed change in terms of stakeholder satisfaction, product viability, market growth potential, potential business capture resulting from the experience gained, etc. In a contracted arrangement, the customer should fund any costs associated for incorporating a change deemed beneficial. If the cost is prohibitive, then the perceived benefits do not exceed the cost of the change.

People Outside of UX

Many people talked about having non-UX people on the team. There’s the obvious benefit of giving clients and business partners first-hand experience, but often there are more intangible benefits for how the work is received.

If I can get the product manager to go on site with the research team, everything else is so much easier. It’s always powerful when they can see things first hand, even more powerful for international research. They are stuck with you for the two to three days of testing. And between sessions. And a dinner. You end up having all these conversations and collaborative sense-making. You argue, and agree. The report just documents what we talked about, and we can now focus not on ‘what happened’ but on how to fix it. It makes my work easier and more productive.

Jim Hudson

No matter how many pictures or video there is always a little gap that the imagination can’t fill. So, I always invite one partner from another department. When they come back to their own team, they can also tell the story with me. I think that’s powerful as well. I may be the only researcher, but everyone can be part of the research, as long as they know how to respect the work.

Yu-Hsiu Li

Being part of the team can also help change attitudes toward UX research. On one project, Anjali Kelkar had what she described as a very complicated team. It was cross functional, but also globally representative. The team had people from the United States, Mexico, Thailand, China, and India, all trying to understand what middle class in India is. It included people from Consumer Insights, R&D [in two countries], and a second research consultancy. It was a very challenging project to manage. One issue was the diversity of the team, but it was also a group of people used to thinking about quantitative data. It took time and a process to help them understand what they would learn from more qualitative methods.

Other teams include people from other departments within the project. When you take developers out to a customer site, it can become a turning point for the project. Peter Grierson described it as having personalized the research for the developers by showing them how their work played out in someone else’s life. Having met some of the real people, the personas became living parts of the design process, not just aesthetic artifacts.

People from some of the most global companies made a strong case for having people from all parts of the product staff included in the research.

When we put a team together, we might have representatives from engineering, research, design, product management, and management. We also want people from each office and people who are covering the country we are interested in, so they have a stake in the study. And, in the country where we do the research, we have some local people who will join us. I also wanted engineers who do not usually see clients join me so they will tell their friends what is going on with this market and with these users. So, you can see it has both a business, a global, and a political aspect for coming up with this team.

Tomer Sharon

One way to not only include people from other departments is to add people from the local office who can be full cultural interpreters, helping you understand the entire context. You may have to teach them how to be part of user research, but the payoff in having them deeply involved is that you get people who understand the company’s products as well as the local culture.

Researchers and designers may be part of one UX group, or may be in separate departments. Depending on the structure of your company or client, you may find designers automatically included or have to reach out to them. This variation is not limited to large companies. Some UX companies make it a strong point that their designers do their own research, rather than relying on a different group of people within their organization; others have specialized research groups.

At Ziba, the designer is always on the project at the beginning. We don’t divide the work up into researchers and designers. Instead, we ask the researchers and designers to think together: What is the framework for thinking about this project? What are the appropriate questions? What are the big research questions we are trying to answer? What is the core challenge? What is the essence? Of course, the researchers are more skilled at formulating those questions and framing them up in ways that can be tackled during the research process, and then formulating what that research process is, doing the actual interviewing, doing the actual synthesis of the data afterward. But we always include the designers in the field so they can see firsthand because we can avoid a level of translation in the handoff from researchers to design. Some things don’t have to be spelled out because they saw them together, experienced the same thing.

Bill DeRouchey

Not everyone agrees. For them, having professional researchers is more important because, they say, it takes trained skills to make the most of the opportunities. Sometimes we think that bringing the designers to the site visit or local visit will take care of the problems, but if not planned well, this can be a costly mistake. Kevin Lee points out that some people adapt well to research challenges and others don’t. This comes back to finding people with the skills and interest to take advantage of the opportunities of global research. It comes back to being aware of yourself and your own cultural and historical perspectives.

What we act in a professional capacity, it is important to realize that we're observing and interpreting something through a mental filter—a filter that we may not even be aware is there. I think it's important ask ourselves what measures we can take to understand our own biases. Because getting out and experiencing new situation is going to be useful only if we are prepared to see things maybe in a new way.

Robert Barlow-Busch

14.1.3 Benefits

A benefit means a company gains profits due to product and service sales or gains advantages due to opex minimization or optimization. Benefits can be tangible and intangible. The common tangible benefits would be cash flow, cash income, and cost reduction. In essence, it is the net profit gain for a running business. The intangible benefits would include raising customer satisfaction rate, improved employee motivation, growing market share, and better reputation for a company’s brand. In the IT industry, the intangible benefits are important, especially for many startup companies. There are many methods to measure intangible benefits, such as multiobjective, multicriteria modes, value analysis, critical success factors, and etc. As we have indicated before, many strategic or long-term benefits are intangible measurements and they are quite difficult to measured or quantify because they are subjective and predictive in nature. We will discuss these topics in later chapters.

2.4.7 Applications, benefits, and costs [ABC]

Most of the economic models that are reviewed so far [e.g. Clements et al., 2005; Poulin, 1997; Clements and Northrop, 2002; Lim, 1996] are based on the assumption that an organization should develop assets and reduce the cost of developing software applications for a domain or for a product line or else develop the products in stand-alone fashion. The applications, benefits, and costs [ABC] [Cohen, 2003] uses the time period over which the organization will apply the assets, which is measured with a refresh rate. In particular, the refresh rate is the particular time period over which the core asset base completely changes to accommodate new technology or consumer demands.

In this model, ABC is described as follows.

Applications [A]: Applications are the different software systems that an organization plans to develop using product line assets over the time period of the business case.

Benefits [B]: The cost saving or any other kind of returns obtained by using product line assets. The benefits are again of two types: tangible and intangible. The tangible benefits are measured directly; these benefits are like quality, profitability, and performance of the derived products. The intangible benefits cannot be measured in terms of product metrics; these benefits include customer satisfaction and professional satisfaction.

Costs [C]: The actual costs of reuse that an organization pays to develop and use the assets.

The main idea behind this model is incrementally increasing the degree of reuse [DOR] of core assets which can incrementally bring down the cost of reuse [COR].

If the refresh rate is short, applications are changing rapidly and the asset base must be rebuilt frequently to accommodate that change as new products are developed.

If the refresh rate is long, assets have longer shelf lives and undergo less change with each new product, COR can be brought down through investment in tools.

If the assets are never refreshed, DOR decreases rapidly over time and COR increases due to necessary changes in existing assets.

Initially, it was through this model that part of the core asset base was developed, including the architecture and some of the components. Later, one or more products would be developed. In the next increment, A portion of the rest of the core asset base and additional products can be developed. Over time, more of the core asset base can be developed in parallel by evolving new products.

Common Justification Pitfalls

You will find failed BI projects in all sizes of companies, in all industries. There are dozens of reasons why BI projects fail, and a flawed justification process is just one of them. Justification problems are usually related to issues with people, not technology. You can blame many of these problems on the following justification pitfalls:

Overzealous business sponsors

The CIO is the sole sponsor

Intangible benefits

Confusion between BI technology and business value

Why else do BI projects fail to meet expectations? The list could go on forever, but here are a just a few, in no particular order:

Scope creep is not managed and controlled

Organizational issues and politics

Assuming technology alone can solve anything

Lack of awareness, education, and internal marketing of the project

Lack of communication

Training focuses on the tool, skipping concepts and fundamentals

Focusing on power users instead of everyone else in the business group

Data quality is not addressed properly

Business group does not commit resources

Lack of oversight from a steering committee

Too big, too fast—rather than taking an incremental approach

Ignoring data shadow systems

I often write about these issues and many, many more on my blog, www.datadoghouse.com.

V. Strategic Planning, Implementation, and Management ISSUES of CIM

As we discussed earlier, CIM consists of overall integration of various functional areas from engineering to manufacturing, inventory, sales, marketing, etc., as well as integration of databases that support various levels of managerial decision problems. Since CIM requires such fundamental changes in organizational communication, both technologically and functionally, as well as massive capital investment, it is the senior management responsibility, with its long-range, company-wide view to integrate CIM strategy into the corporate strategy, to evaluate all possible strategies and intangible benefits, to judge its feasibility, and to decide on its adoption.

It has been reported that the failure of CIM to live up to its promise of a fully integrated information system has been due to a lack of commitment from senior management. While senior managers have taken full advantage of such innovative concepts as TQM and JIT scheduling, they have not fully utilized the economic benefits of CIM. Lack of understanding at the corporate level about technology management and its potential have been cited for the failure. More specifically, for nontechnical managers, it has been easier to envision the applications of the TQM and JIT concepts, and to measure their benefits. However, CIM has been perceived as a technological initiative that requires highly sophisticated hardware and software integration. Furthermore, the characterization of CIM technology has been depended on by the manufacturing industry and thus viewed as a highly technological issue rather than management issue.

Due to the technology orientation of CIM, it has been predominantly implemented by engineers and line managers. Consequently, the objective has been to improve efficiency and reduce costs rather than on improving corporate-wide integration of information systems. The engineering approach in development of CIM has also been implemented from bottom up where individual functional areas and lines have undertaken CIM projects based on their local needs and on a piecemeal approach, and thus has led to islands of automation, focusing on localized benefits. In particular, the lack of integration among functional areas such as marketing, purchasing, and production planning, and across key technologies such as MRP, CAD, and robotics, has been a stumbling block in the successful implementation and management of CIM processes. This is partly due to the lack of leadership from MIS professionals.

MIS professionals have traditionally focused on business functional areas such as accounting, finance, and planning data, and have shied away from robots and programmable controllers. Thus, MIS departments are lagging behind other departments in their contribution to CIM development.

To ameliorate this problem, senior management, particularly chief information officers, must approach CIM as a tool for competitive advantage in the market place, and integrate CIM strategy into corporate strategy and consider all possible strategic and intangible benefits as well as tangible ones. CIM technology contributes to competitive advantage by being responsive to the market changes and being flexible to redesign and manufacture according to market conditions, as well as in identifying the needs of a specialized market and responding effectively and efficiently to those needs.

Given the dimension and the characteristics of CIM strategy, it embraces considerations for the office and the business of the future as well as the factory of the future. The CIM strategy involves a dramatic change in manufacturing and business philosophy, as these changes will affect the entire corporation. Therefore, the need for a strategic plan detailing how a manufacturing and business concern can be addressed, via CIM, involves similar problems and issues inherent in information technology and MIS planning. The CIM strategy has to be viewed from an information technology management perspective and must be integrated into long-range business strategy by senior management. Senior managers must be involved in the CIM strategy development as the participants rather than spectators. Their roles should be shifted from being represented by subordinates to ones who create business strategy with CIM as an integral component. In this context, senior management can drive CIM strategy as an inseparable component of the overall business strategy.

What is an tangible benefit?

What is tangible benefit and intangible benefits?

Which of the following is an example of a tangible benefit?

What is an example of a tangible benefit to IT investment?