How to classify projects and purchases within organisations

I find it helpful to group change programs, projects and purchases within organisations  into the following categories.

Infrastructure – Upgrades to the essential building blocks of an organisation. Examples include new offices, faster computer networks and improved phone systems. Something which has the potential to affect improvements across the bulk of the workforce.

High Performance Workforce -Targetted improvements for a specific area of the company’s workforce. Examples include better accountancy systems for finance department and more efficient development tools for software programmers. Something which makes a targetted individual employee more productive.

External Enterprise – Improving the reach of the company to attract more customers or channels to market for the products or services offered. Examples include adding eCommerce to the web site, or more efficient advertising programs.

Using the above categorisations helps clarify the business case necessary, and who is likely to sponsor the project from within the organisation. For example it’s hard to build a business case for Infrastructure projects based on individual productivity improvements.

A case in point here is the adoption of mobile email within organisations. Early business cases attempted to justify expenditure through time saved by individuals and then quantify in monetary terms. These proved extremely weak as a business driver because they were not based on tangible measurements and results. Instead mobile email gained traction when it became part of a general upgrade to an organisation’s communications infrastructure eg. upgrading mobile phones to models which delivered email as a convenient extra feature.

 

LinkedIn IPO

comparing LinkedIn IPO in 2011 with Google IPO 2004

Google raised $1.6bn for market cap of $23bn with 17% rise at end of trading day one. Google profits were $105m on revenues of $961m in previous accounting year. 7% of shares were offered.

LinkedIn raised $350m for market cap of $4.3bn with 108% rise at end of trading day one. LinkedIn profits were $3.4m on revenues of $243m in previous accounting year. 8% of shares were offered. LinkedIn does not expect to be profitable in 2011.

The market of 2011 is a lot more generous than 2004. Or is it desperate to find a home for its cash?