Make it relevant, right now
Smart CIOs will assess the new lay of the land and be able to explain how and why the project is still relevant or, better yet, even more relevant. Explain the value of the project in the context of current needs, says Teri Takai, CIO for the California state government, which is in the midst of a budget crisis.
While the state's IT budget has suffered cuts along with every other department's, she has been able to maintain long-term projects such as the replacement of the state's 30-year-old payroll system by persistently stressing the benefits of the new system. "The message has to be crafted in a way that provides immediate justification," Takai says.
If the company needs cash, explain how the project contributes to cash flow. Perhaps the executive team wants to take advantage of the situation to acquire weak competitors. Emphasize how the project strengthens the company's ability to acquire and digest companies.
You may have to reorganize the project in order to make it relevant to immediate needs. Can you adjust the timing or the scope? Can you push ahead on things that produce immediate revenue? Can you defer certain costs?
At Harrah's Entertainment, projects have always been evaluated based on their contribution to top-line sales or bottom-line profit, plus some less explicit, hard-to-measure factors, says Heath Daughtry, the company's vice president of enterprise IT. But today, projects need to demonstrate benefits in several major areas, including boosting efficiency and enhancing the customer experience, he says.
"It's no longer a one-dimensional ROI evaluation," says Daughtry. "It has to hit on all the business strategies -- on revenue, margin, EBITDA [earnings before interest, tax, depreciation and amortization], customer experience."
That meant making some changes in one of Harrah's major initiatives so it would bring in more earnings sooner. The initiative, called Personalized Real-time Interactive Slot Marketing (PRISM), is designed to provide information and digital entertainment directly to customers through Harrah's 65,000 slot machines.
Harrah's is aggressively rolling out the project this year in its most profitable markets, where it is most likely to see the highest return on its investment, says Daughtry. In less profitable markets, it will wait till 2010.