Gartner Research

How to Use TCO and ROI Effectively to Justify Projects and Technologies

Published: 23 February 2015

ID: G00270504

Analyst(s): Ken Agress

Summary

IT professionals are often asked to provide financial justifications for the projects they are planning and implementing. Using TCO and ROI effectively can help build better business cases and create a more useful dialogue with business leaders while increasing IT's credibility and effectiveness.

Table Of Contents

Synopsis

Analysis

  • The Basics of TCO and ROI
  • Best Practices for Preparing TCO and ROI
    • Engage Finance to Get the Model Right
    • Only Include Assumptions You Can Defend Concretely
    • Don't Estimate Benefits Without Appropriate Management Involvement
    • Make Comparisons Comparable
    • Be Prepared to Address Variability and Risk
  • Using TCO and ROI Appropriately
    • When Should ROI Be Presented?
    • When Should TCO Be Presented?

Conclusion

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