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	April 10, 2009 Quantifying Technology Investment Risk A Component Of The Forrester Total Economic Impact™ Methodology by Chip Gliedman with Jon Erickson, Sharyn Leaver, Varun Sedov	Average: 5  (3 ratings)

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Executive Summary

The process of risk measurement has been confounding decision-makers within IT for some time, resulting in the use of weak qualitative analysis that only loosely ties to project outcomes. But using the basic financial community equivalency of "risk equals uncertainty" can help IT leaders translate the uncertainty that risk creates directly into the potential return on an investment. The power of these models lies in their ability not only to quickly yet accurately measure the impact of risk but also to communicate that impact to the rest of the organization. The result? Increased credibility and better risk management.

TABLE OF CONTENTS

• IT Investments Come With Risk — But How Much?
• The Role Of Risk In IT
• Use A Simple Probability Distribution To Quantify Risks
• An Example: Quantifying The Impact of Risk On A Build Or Buy Decision

RECOMMENDATIONS

• Quantify And Communicate The Impact Of Risk On Estimates
• Supplemental Material
• Related Research Documents

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