Establishing Financial Justification

This is the only way the organization can be able to sustain its short-term goals which are the stepping stone to the long-term goals and the vision of the organization. Although it might be costly to the organization in the process of putting it into place as well as implementing, they have no option but to put the interest of the organization first hence achieving the desired goals. I have chosen to access Unilever Company which is global beauty and a personal company which has been raising in the recent years due to its global spread, due to its excellent financial management systems the company has been able to expand its operations to the entire world(Dos Santos 75). The company still has to justify the use of other projects in order to meet its long-term goals and objectives.

The IT project approval process established by Unilever is a consistent and outlined procedure because these critical stages whereby the financial justification comes into place and Unilever is determined to know exactly the cost investment of investment for the benefit of the organization. Unilever Company makes sure that for the project to pass through this stage, it has demonstrated well-planned procedures with the probability of the best results for the company. The fourth step that Unilever undertakes is having a clear understanding of the project once more as well as being able to speak to itself to all members of the company the benefits that the project will have to the company in the future if it is implemented (Maiden et al 78).

At this stage the opinion of everyone matters and the reasons and critics are usually taken into serious considerations, this is to make sure that all areas of the company can really benefit from this project in case its implemented. The cost of the implementation is really considered in addition to the cost of hardware and soft wire so that it could not go beyond the companies budget hence likely to affect other operations of the organization. The fifth step in the process in determining the return on investment of the project, Unilever is keen in identifying projects with a low return on investment because by doing so they will be able to distinguish between dormant projects and profitable projects. Unilever makes sure that other projects characteristics are fully addressed in the process of strategic and tactical justification.

A quick overview of the project is conducted with the aim of making sure that indeed the project has good achievable financial returns, as well as there, are possibilities of meeting the needs of the organization which is actually the payback period of the project (Chorafas and Steinmann 16). The company takes this just because some financial justification comes with high costs which if not deeply addressed can easily bring the company to its knees, Unilever is determined to implement its long terms goals and that is why it is critically engaged in this process. For Unilever company to declare the investment successful it must be able to produce results which double the initial cost of investment. Summary of contemporary concepts of Unilever Company Indeed every organization has fully adopted the use of information systems in their operations or the running of the day to day activities of the company.

In this case normally when the projects are ranked according to the internal rate of return then the company with the highest rate of return is selected from the top to the bottom for implementation which reduces the work of the management in analyzing the projects. The concept of Return on Investment The return on investment usually measures the loss or gain the investment generated relative to the invested amount (Benston 278). It is usually expressed as a percentage and normally used for personal decision making with the aim of comparing the business efficiency of different projects, it basically compares the organization returns to cost incurred in the initiation of the project or investment (Weill et al 26). Most companies compare investments that have equal return on investment to access the risk that can be associated with the with other factors of the investment, the company can decide to choose the company with the highest rate of return because the company believes that it is that investment that will yield more results in the near future as compared to those with the lowest percentage.

Unilever is as well not exceptional since it also evaluates its projects using the same criteria in order to come out with the best investment. The two forms are the even cash flow and the uneven cash flow; the two forms derive the same result (Phillips et al 245). Even cash flows, for instance, is normally calculated by dividing the total worth of the investment with the constant annual cash flow after tax while the uneven cash flow which means that the number of cash flows is different. The payback period in this form is calculated by simply eliminating the investment cumulative cash flow until it becomes the same as the original investment amount. Conclusion The organizations have really invested in IT in the recent years which have enabled them to effectively run their day to day operations smoothly and effectively.

Apart from the investment of IT services to the organization facilities especially on human resource, establishing financial justification is the most essential part of the IT implementation in an organization and the companies should engage in these projects so that they can be able to meet their long-term goals. " Handbook of Improving Performance in the Workplace: Selecting and Implementing Performance Interventions 2 (2009): 823-846. Maidin, Siti Sarah, and Noor Habibah Arshad. "IT governance practices model in IT project approval and implementation in the Malaysian public sector. " Electronics and Information Engineering (ICEIE), 2010 International Conference On. Vol. Benston, George J. "Consumer protection as justification for regulating financial-services firms and products. " Journal of Financial Services Research 17. Ward, Jea, P. Taylor, and P. "Flexibility in manufacturing: a survey.