Agilent case study
Agilent Case Study – IT Investment Portfolio Analysis
1. Mission & Business Objective
Agilent Technologies, a world leader in manufacturing electronic and bio-medical measurement instruments has enjoyed tremendous growth and success since its inception.
In the past few years, Agilent has acquired many companies. Acquisitions tend to lead to revenue growth, market expansion and deeper penetration into existing markets. One of the challenges inherent in acquisitions is achieving economies of scale through reuse.
With various acquisitions, Agilent recently reorganized its IT department and is in a position to invest $39 million on IT projects that will benefit the company within the next 5 years. The primary objective of the organization is to reduce cost and increase revenue by investing on IT projects that aligns with organizational strategy. 2. Strategic IT investment projects
Agilent business units came up with 3000 IT project candidates for strategic investments for 2013. The list has been narrowed down considerably and a total of 8 projects were finalized. The allocated budget for these projects is $39 million.
The potential projects identified are
3. IT Investments Portfolio Analysis
Ward’s portfolio approach is utilized to analyze the 8 IT investment portfolios. According to Ward’s methodology, the IT investments are segmented into four categories.
IT Category
Project Name
Strategic Investment
1. Siebel Implementation
2. My SAP Portal
High Potential Investment
3. SalesForce.com implementation
4. SAP Business warehouse conversion to XML
5. Red Pepper
Factory Investment
6. WebMethods Upgrade
7. Oracle License
Support Investment
8. HP IT (BAC) A 5 year NPV for all IT investments is calculated at the discount rate of 11% based on the cash flows and cost of the investment. The table below displays the profitability index and ROI calculations for each investment for a 5 year time period.
3.1 Recommended projects
1. Mission & Business Objective
Agilent Technologies, a world leader in manufacturing electronic and bio-medical measurement instruments has enjoyed tremendous growth and success since its inception.
In the past few years, Agilent has acquired many companies. Acquisitions tend to lead to revenue growth, market expansion and deeper penetration into existing markets. One of the challenges inherent in acquisitions is achieving economies of scale through reuse.
With various acquisitions, Agilent recently reorganized its IT department and is in a position to invest $39 million on IT projects that will benefit the company within the next 5 years. The primary objective of the organization is to reduce cost and increase revenue by investing on IT projects that aligns with organizational strategy. 2. Strategic IT investment projects
Agilent business units came up with 3000 IT project candidates for strategic investments for 2013. The list has been narrowed down considerably and a total of 8 projects were finalized. The allocated budget for these projects is $39 million.
The potential projects identified are
3. IT Investments Portfolio Analysis
Ward’s portfolio approach is utilized to analyze the 8 IT investment portfolios. According to Ward’s methodology, the IT investments are segmented into four categories.
IT Category
Project Name
Strategic Investment
1. Siebel Implementation
2. My SAP Portal
High Potential Investment
3. SalesForce.com implementation
4. SAP Business warehouse conversion to XML
5. Red Pepper
Factory Investment
6. WebMethods Upgrade
7. Oracle License
Support Investment
8. HP IT (BAC) A 5 year NPV for all IT investments is calculated at the discount rate of 11% based on the cash flows and cost of the investment. The table below displays the profitability index and ROI calculations for each investment for a 5 year time period.
3.1 Recommended projects
References: Schniederjans, M.J., Hamaker, J.L., & Schniederjans, A.M. (2010). Information Technology Investment : Decision-Making Methodology (2nd Edition)