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Measure an ADM's financial responsibility

By MaryWeilage Editor ·
This week's Application Developer Management e-newsletter explores measuring an application development manager's financial responsibility.

How financially responsible are you for which projects your organization accepts? What criteria do you use to determine if the financial investment is worth doing the project? Have you ever been held personally responsible when a project didn't deliver the projected ROI? Please share your experiences.

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ROI?

by bruce.miller In reply to Measure an ADM's financia ...

Have I ever been held personally responsible when a project didn't deliver the projected ROI? Yes. But the projected and delivered ROI were determined politically, as was who to blame.

Suppose we built a new CRM system, and initial sales went up by 15% the year after it went online. The project cost $1M, profits on initial sales increased by $400,000, but company net profit decreased $2M because the ERP's just-in-time function failed, causing late delivery and cancellation of orders. Our ROI was:

a) 40% the first year.
b) 0. Sales would have gone up anyway.
c) -160%. That money should have gone to fix the ERP, thus avoiding the $2M loss.
d) -200%. That money should have gone to fix the ERP, and sales would have gone up anyway.

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