Final answer:
It is true that companies should conduct sensitivity analysis to assess the impact of assumptions on the projected outcomes of IT investments. This analysis provides valuable insights that enable better-informed strategic decisions, especially in regards to preventing costly events like data breaches.
Step-by-step explanation:
In reply to the question of whether companies should assess the sensitivity of results to assumptions when making the business case for an IT investment, the answer is true. It is crucial for businesses to understand how different assumptions can affect the projected outcomes of their IT investments. This practice, known as sensitivity analysis, helps in identifying which assumptions are most critical to the success of the project and how changes to those assumptions can impact the forecasted results.
For example, if a company is considering an investment to bolster its cybersecurity infrastructure to prevent data breaches, it would need to estimate the potential financial impact of future breaches without the investment, as well as the costs associated with implementing new security measures. The company would have to make assumptions about the frequency and severity of data breaches, the effectiveness of new security measures, and other related factors. By conducting sensitivity analysis, the company can determine which variables have the greatest influence on their decision, allowing for better-informed strategic planning.