Tales, Truths, & Tolerisms

So one of the more interesting functions of my job is to create business cases on various IT projects to determine each project’s prioritization.  So on the logical side of things, this means that I research the current problem/opportunity and a high-level solution to said problem / opportunity. This also means briefly defining the scope of the project as well.

The meat of the Business Case is the “Summary of Financial Impacts” section where I get to use such interesting concepts as Net Present Value, IRR, and Payback Method. Needless to say, in this economy, executives definitely focus on the six, seven, or eight figure financial impact when prioritizing a project. This of course means that projects that are directly tied to revenue streams or straight-forward cost cuts are pretty cut and dry. The issue I am running into is how do I put a financial value on an avoided risk.?

So lets say its been estimated that there is a 1% chance that if my company does not do a project, then the company could lose a million dollars. So one solution I read was to simply multiply the probability by the amount, and therefore place a annual benefit of $10,000. Another solution was to create multiple scenarios where the benefits could range from 0 to $1 Million with$10K being called the median scenario.

I am currently leaning towards running three different scenarios where in the perfect world, a project would only have X benefit. In a normal world, the project has an X+$10K benefit and in a high risk world the project would have a X +  $1Million benefit. What do you guys think?

http://www.cnn.com/2009/TECH/science/10/13/social.networking.class/index.html

So CNN had an article a few days ago about the concept that there is a certain class distinction between the folks who use Facebook and Myspace.  I thought the article was pretty interesting yet a little inaccurate. Two years ago, I think the article would have been accurate. In my own personal life, all of the people I went to college and worked with were on Facebook, and the people I knew from parties, bars, and places like there could only be found on MySpace.  Now, I don’t think thats necessarily true. I think everyone has been willing to trade in the custom backgrounds and annoying profile music for a stable social network that is extremely usable and whose settings on things like privacy, photos, and apps are pretty simple to figure out.

Let’s be honest, I logged into my old Myspace on 2 consecutive days. There were a total of three status updates from my friends over a span of 24 hours. Two of them were really twitter updates, so in reality, of my 120 friends on Myspace, only one of them actually updated their Myspace status. I suspect Myspace will join the exclusive company of Webvan, Geocities, Angelfire, and Lycos very soon.