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Totally agree. Business such as life are based on our decisions. And the bad ones, many time are taken because of the lack of information.
A business case must answer the following 5 points. If you cannot answer them appropriately, then you do not have a business case. Simple.
What a business case does not have is a list of options. If you are not sure which option, then you cannot answer the first point:
If there are options, then there are cost and benefits analysis, domain research etc to determine the best option.
Vis,
1.What do you want to buy, do, make or get? This means that you must be able to state exactly what it is that you want. Brand, size, colour, whatever...
2. When do you want it and for how long? Some suppliers will charge a factor premium for fats delivery, your financial controller may want some time to manage the cash flow impacts/leases etc. Buy, lease, rent are all decisions that can be framed around this point.
3. How much will it cost? Not just acquistion costs but whole of life costs including upgrade testing, migration to the new platform/version etc. Dont forget disposal costs at end of life.
4. The most important point of all!! What happens if we do not do this? Can we live for another year/month/forever with what we have? Or will some financial catastrophe take place? Is a new risk becoming clear here.. or not.
5. When do I get my investment back. This could be PEST paypack (political, economic, social or technical) and how much?
These five points should indeed form the guts of the executive summary and should be written and managed first. I even send the executive summary as a stand alone document to test the decision waters before spending time and effort expanding the case.
What a business case does not have is a list of options. If you are not sure which option, then you cannot answer the first point:
If there are options, then there are cost and benefits analysis, domain research etc to determine the best option.
Vis,
1.What do you want to buy, do, make or get? This means that you must be able to state exactly what it is that you want. Brand, size, colour, whatever...
2. When do you want it and for how long? Some suppliers will charge a factor premium for fats delivery, your financial controller may want some time to manage the cash flow impacts/leases etc. Buy, lease, rent are all decisions that can be framed around this point.
3. How much will it cost? Not just acquistion costs but whole of life costs including upgrade testing, migration to the new platform/version etc. Dont forget disposal costs at end of life.
4. The most important point of all!! What happens if we do not do this? Can we live for another year/month/forever with what we have? Or will some financial catastrophe take place? Is a new risk becoming clear here.. or not.
5. When do I get my investment back. This could be PEST paypack (political, economic, social or technical) and how much?
These five points should indeed form the guts of the executive summary and should be written and managed first. I even send the executive summary as a stand alone document to test the decision waters before spending time and effort expanding the case.
I highly suggest identifying the data your decision-makers are using to make their project/program approval decisions. Who is making the decision and what criteria are they using? Then test the template and the content of your first few business cases on these decision-makers. Do they understand it? Did you provide them all of the information they needed? And when you get really good at this, use the business case process as a means to continually improve the project decision-making process.
Steve Romero, IT Governance Evangelist
http://community.ca.com/blogs/theitgovernanceevangelist/
Steve Romero, IT Governance Evangelist
http://community.ca.com/blogs/theitgovernanceevangelist/
Very good comment. I often speak on the subjects of decision making, portfolio management and business cases, and without fail I get inquiries from people looking for canned answers. It does not work that way.
The important point you are making relates to the transparency of the decision criteria. Sometimes, top decision makers choose to keep it concealed, for any number of reasons. It's a losing proposition, frankly. You have to know as much as possible about it when you put your case together.
Thanks for this comment.
Ilya
ibogorad@bizvortex.com
The important point you are making relates to the transparency of the decision criteria. Sometimes, top decision makers choose to keep it concealed, for any number of reasons. It's a losing proposition, frankly. You have to know as much as possible about it when you put your case together.
Thanks for this comment.
Ilya
ibogorad@bizvortex.com
There needs to be an underlying issue or concern for most business cases to even be considered, and therefore to be effective. There are times that business cases can be developed around opportunities, such as implementing lean initiatives in order to cut costs and waste, but these tend to be far fewer in number.
A good way to get the attention of an executive to sponsor the initiative is to focus on something that is important to them. Yes, you should "speak their language" as much as possible and avoid technical jargon that can turn many non-technical people off. If you can relate your issue to something that is important to the reader then the chance of moving forward is greatly increased.
When listing alternatives, it is very helpful to be realistic in your description and assessment of the alternative. This provides credibility which leads to confidence. What is the gap from here to there? What are the risks? What are the estimated costs? When, where, and for how long will those costs be incurred? Providing answers to questions like this before they are asked is extremely valuable, especially if those answers are balanced and reasonable.
Finally, prepare for objections. You might not want to address them in the business case (depending on your specific environment), but you should be prepared to provide a solid response to objections that you can anticipate. Again, this leads to confidence.
Business cases are a great tool, but like most tools it takes a little bit of skill and practice to create something worthwhile. So, look for examples and practice now so that you will be ready when the time comes for writing your own business case.
Cheers,
Chip Nickolett
A good way to get the attention of an executive to sponsor the initiative is to focus on something that is important to them. Yes, you should "speak their language" as much as possible and avoid technical jargon that can turn many non-technical people off. If you can relate your issue to something that is important to the reader then the chance of moving forward is greatly increased.
When listing alternatives, it is very helpful to be realistic in your description and assessment of the alternative. This provides credibility which leads to confidence. What is the gap from here to there? What are the risks? What are the estimated costs? When, where, and for how long will those costs be incurred? Providing answers to questions like this before they are asked is extremely valuable, especially if those answers are balanced and reasonable.
Finally, prepare for objections. You might not want to address them in the business case (depending on your specific environment), but you should be prepared to provide a solid response to objections that you can anticipate. Again, this leads to confidence.
Business cases are a great tool, but like most tools it takes a little bit of skill and practice to create something worthwhile. So, look for examples and practice now so that you will be ready when the time comes for writing your own business case.
Cheers,
Chip Nickolett
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