Taking action requires resources. Without the right resources, your customer can’t buy even if they want to. The Resource Decision involves an evaluation of Economic Value and Risk, Payback or Return, availability of funds, and so on. It’s not just about money. It takes people to head up projects, and other people to do the work, as well as managers or committees to provide oversight and accountability. The Resource Decision should include a close look at all the resources an organization would need to expend to buy, implement, and make use of a solution.
The question, ‘Do we have the resources to buy?’ considers the investment of time, money, and manpower by looking at the following:
- Budgeting and Planning: ‘Have we planned for, and allocated funds for, this investment?’
- Availability of Funds: ‘Do we actually have the money on hand, or the financing in place, to make this investment?’
- ROI Requirements: ‘Does this investment meet the minimum hurdle rate (ROI or Payback) to even be considered?’
- Portfolio Management: ‘How does this investment impact our overall investment strategy and exposure to financial risk?’
- Manpower: ‘Do we have the people and the bandwidth to make this project successful?’
- Oversight: ‘Is there some person, or a committee, who will take ownership of, and responsibility for, the success of this project?’
- Prioritization: ‘Of all the places we could invest these resources, which is the best right now?’
The Resource Decision can get complicated, especially for a bottom- up initiative that has to prove its value to senior decision makers. A top- down initiative may get funded because it’s ‘what the CEO decided was the right thing to do.’ But bottom-up initiatives are typically scrutinized very carefully. They often require return-on-investment analysis, which looks at the proposed project as financial investment. A bottom-up initiative will likely need to meet certain minimums or thresholds just to be considered, and then will be compared against other uses for the resources being requested. The more we know about the way our customer evaluates and justifies investment in projects, the more we can do to make sure our project earns approval.