I’m doing some basic data gathering from several sources – typical work of an analyst. In this blog posting, I’m looking for some current anecdotal evidence around BPM investment analysis mechanics – nothing fancy. From our BPM survey, we know that cost savings are critical BPM measures of success. I’m interested in the mechanics of how you measure those actual savings as a percentage of the total outlay:
- Do you do project-level investment analysis of any kind (payback period, ROI, IRR, etc)?
- Do you calculate a predicted ROI or IRR for your BPM projects before they are started?
- Is a formal, predicted ROI or IRR a requirement for approval/funding?
- Do you measure post-implementation ROI or IRR?
- As you calculate the present value of your net benefit stream for your investment measures, do you cap the number of future years you will project out?
- How long (number of years) is the typical benefit stream that you feel comfortable calculating?
- What discount-rate ranges (interest rates, cost of capital, etc) do you use for your NPV calculations?
- What investment levels (e.g., IRR levels) do you consider borderline for project approval?
- What investment levels make you dance with glee?
Well over a decade ago, we determined that workflow projects met or exceeded ROI expectations about 90% of the time. A BPMS is not a workflow tool, and this is 2009 – a lot of the low-hanging fruit is gone. Are you seeing the same level of investment performance?
Let me hear from you, and thanks!