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Home > Newsroom > Press Releases (17th Sep 2007)
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Press Releases
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US Technology Launches IPA Services to Help CFOs Ensure IT Project Investments Generate Expected Returns
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Launch Coincides with Upcoming IPA Web Cast, White Paper and Case Study
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ALISO VIEJO, Calif. – September 17, 2007 – US Technology, a leading provider of
IT services and Business Process Outsourcing (BPO) solutions for Global 2000 enterprises,
announced today the launch of Investment Profitability Assurance (IPA) services
to help CFOs and CIOs bridge the gap between IT project investment effectiveness
and achieving corporate financial goals. The new IPA services give CFOs the ability
to test project profitability before a project is approved. And for IT projects
already under way that are not making expected returns or cost savings, IPA identifies
the best steps to either restore expected returns or to prevent unprofitable projects
from becoming financially detrimental.
Studies show that only 25 percent of the IT projects that are supposed to make money
actually do, while an additional 25 percent are cancelled mid-way when it is realized
that financial targets are not going to be met. Worse, 50 percent of projects experience
budget overruns, lower revenues or negative returns. IT projects that could have
generated additional corporate income often go unfunded because budget has been
exhausted on these unprofitable endeavors.
"What CFOs cannot understand, and are tired of tolerating, is how projects fail
so miserably when business case and ROI analysis have been done. The reality is
that traditional methods fall short in predicting success and often result in unattainable
or fictitious financial targets, said Mike Zerkel, vice president, new and emerging
accounts, US Technology. “We are introducing IPA as a way to ensure that the majority,
if not all, of IT projects result in successful financial outcomes when they are
expected and that the right mix of projects are selected to achieve the maximum
financial benefit."
IPA: How to Allocate the Right Budget to the Right IT Project
IPA is a precision and predictive engineering tool that takes the air out of fictitious
business cases. Originally developed for financial portfolio management, IPA is
being successfully applied to the justification and selection of IT investments.
IPA is a best practice investment methodology and toolset that provides an evolutionary
alternative over traditional NPV / ROI methods. It is based upon Nobel Prize award-winning
economic theory adapted specifically to ensure the success of profit-generating
projects that are heavily dependent on IT.
IPA has been successful in prioritizing hundreds of proposed IT projects to maximize
both short-term and long-term investment returns for Global 2000 clients over the
past 10 years. It has also been used to identify compelling financial opportunities:
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in times of economic uncertainty and perceived business risk |
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where initial business cases appear thin and unsupportable |
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when the amount of available budget appears to be inadequate to fund critical projects |
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where management has become skeptical of business plan performance using traditional NPV |
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In addition to the launch of its IPA services, US Technology will host a Web cast
to explain the benefits of IPA and has collateral available on its Web site:
IPA Favorably Impacts the Financial Results of IT Projects
With IPA, CFOs know the quantified, economic short-term value and chain of long-term
business value in advance of committing investment dollars. IPA uses a variety of
techniques to achieve a comprehensive view of an investment's strategic value that
are then captured in an "Investment Return Roadmap" (IRR). For senior management,
the IRR details the immediate, short-term value of a project investment; how value
can be expanded by showing what decisions need to be made and when; and whether
additional investment is necessary. Lastly, the IRR provides senior leadership a
path to phase out projects should their returns prove detrimental to the company's
financial goals.
About US Technology
US Technology is a leading provider of end-to-end IT services and BPO solutions
for the Global 2000 market. US Technology offers a client-centric Global Delivery
Model that provides the optimal mix of senior local resources with the cost, scale
and quality advantages of offshore operations for each client. The company is known
for a relentless focus on its clients, flexibility and commitment beyond contract.
Headquartered in Aliso Viejo, California, US Technology has more than 5,000 employees
worldwide and is certified globally as CMMI® Level 5, P-CMM® Level 5, and ISO 27001.
For more information visit: www.ustri.com.
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