Speaker: Paul Davies
Venue: Tour Speaker; he gives his talk in Helsinki, Stockholm, Copenhagen, Hamburg, and Warsaw
Justifying the Return On Investment (ROI) from Systems Engineering is an issue that continues to surface whenever Systems Engineers meet at conferences. Without a compelling business case it can be a struggle to gain support from senior management to fund investment in the systems approach. This presentation aims to introduce you to building your business case, drawing on the accumulated body of evidence.
In 2000, Sarah Sheard and Chris Miller published “The Shangri-La of ROI” on the subject of the value provided by Systems Engineering. In the opening paragraph, they summarised that “This paper shows that:
(1) There are no “hard numbers”;
(2) There will be no hard numbers in the foreseeable future;
(3) If there were hard numbers, there wouldn’t be a way to apply them to your situation; and
(4) if you did use such numbers, no one would believe you anyway.”
However, time has moved on, and recently reported studies have started to quantify the correlation between SE practices and business benefit. In this paper, consideration is given to business models for project engineering, a variety of intervention strategies, and the calculation of resulting Return on Investment figures. Sheard and Miller’s points (1) and (2) are therefore seen to have been overcome. The paper also covers some empirical rules for consideration of point (3), and start to address the barriers to adoption of point (4).
The presentation content is based on that delivered by Paul at the INCOSE UK ASEC2013 conference, which won the Best Presentation award. The underlying theory is based on two extensive and academically refereed studies, plus several extra corroborative later studies. The two principal studies are:
- “Systems Engineering Effectiveness”, NDIA /SEI / Carnegie Mellon University, 2012-13 (plus earlier study 2008) – lead editor Joe Elm
- “Systems Engineering Return on Investment” (SEROI), University of South Australia PhD thesis 2013, Eric Honour [INCOSE Fellow and Past President]
The presenter is the lead author of the INCOSE UK 1-page Guide “Z3: How Systems Engineering can save your business money”.