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Thursday, December 29, 2011

Do PM's Know How to Determine Project Impact?

Project Managers usually think that project impact is about money (cost for equipment, labor, facilities, etc.). This may be an appropriate view for what we do -- deliver projects or programs within a specified budget (cost) and time frame.

However, because cost is also closely aligned to benefits and impact, we often leave the benefits and impact analyses to others who may be more expert in project justification from the business end.

Every project is started by a business with certain expectations for benefits and impact.  If the project does not reach the expectations of the business, then it will be labeled as a Failure and, you, as the Project Manager, may be held accountable for not achieving the expected results.  For this reason, it may be important to your career that you understand some of the terms and methods used for determining and tracking benefits and impacts, also known as Return on Investment, ROI.

A correct project analysis should include cost, benefits, and impact. The difficulty is how to monetize “soft” impacts, e.g. things which may not have a monetary value, such as improvements in productivity because of the psychological impact of a “friendly” user interface.

There is an excellent paper on ROI: “Return on Investment Analysis for E-Business Projects” by Mark Jefferey, Northwestern University, 2004,


The paper is well researched with a list or references that provide additional information.

This paper gives ". . . the key concepts necessary to understand and calculate ROI for e-business and IT projects. In addition, the limitations of calculating ROI, best practices for incorporating uncertainty and risk into ROI analysis, and the role ROI plays in synchronizing IT investments with corporate strategy. . ." are discussed,

Please share your experiences, opinions, and references for ROI and project benefits and impact.



  1. Great to see your first post on! I hope that this is the first of many.

    That is a cool paper - my MBA must be dusty because some of that material felt new to me :)

    Congratulations again fellow Blogger!

  2. AND - This is the current page view leader on Way to go Charles!