Build a business case that will guide your project to success

Jason Hiner: Take a look at that remote corner of your bookcase, and you may spot a dusty binder or two containing a long-forgotten business case document. Creating it required hours of hard work and maybe even a few heated exchanges with colleagues. But despite all that effort, there it sits -- nestled between the books "Getting the Most from MS DOS 3.0" and "Punchcards: The Future Is Now."

I'm Jason Hiner, and today on Sanity Savers for IT Executives, I'll explain why your business case deserves better treatment -- and how you can turn it into one of the most important components of an IT project.

The business case presents the cost and benefits of a proposed project, serving as a tool to sell that project to the organization. But that's NOT its most critical function.

The business case is really the glue between an organization's IT project portfolio and the day-to-day management of a project. A GOOD business case should provide a frame of reference for all critical project decisions on an ongoing basis.

As your team become mired in the operational aspects of completing a project, it's easy to make expedient decisions in the moment and wander AWAY from the original intent of the project. The business case enables your staff to keep sight of that intent and to ask themselves, "Has our vision changed or is the project in need of a course correction?"

A well-crafted business case spells out what a project should accomplish, what success will look like and how it will be measured, and what circumstances might prompt a reconsideration of the project. To accomplish this, every business case should cover three critical areas:

1. The pitch (How will the business benefit?)
2. Objectives and measures (What does success look like?), and
3. Failure criteria (Should you hold or fold?)

Let's look at each section more closely.

The pitch is what most people think of when they consider a business case. Like a successful advertisement, the pitch briefly reviews the current state of affairs, provides a vision of the future -- with its financial and organizational benefits -- and then lays out the cost.

The best pitches are developed with IT serving as advisor rather than as the primary party responsible for producing the pitch. Along with the affected business units, they can pin down the project's benefits. Then, IT and the business can determine the costs of the project, with IT covering the technical piece and the business covering sensitive areas like change management and organizational design.

When building a business case, a lot of teams rush into complex machinations to determine ROI and present cash values. However, the starting point is actually much simpler: Just ask the question  What does success look like? 

Once you've defined your vision of success, you can establish metrics around it. For example, if a shiny new sales automation tool is under consideration, one element of the vision might be more rapid order acknowledgment from the back office. Take this element and put measurable terms around it. Should orders be confirmed within two days or two hours? Also calculate what cost savings or  new money  might be generated by the different outcomes.

Turn each element of your vision of success into an objective with associated metrics. Then everyone will have an understanding of the project s scope, expected outcomes, financial benefits, and quantifiable results.

It may seem pessimistic to contemplate failure before a project even starts, but that's actually the BEST time to do it. If the project hits a bump in the road, your pre-established (and emotionally neutral) failure criteria provide an objective way to decide whether the project should be canceled. In fact, every stakeholder meeting should briefly regard the failure criteria for the project to see whether they have become a real concern.

Your failure criteria should target two areas: project and environmental. Project-level failure criteria are derived from your established objectives and measures. Environmental-failure criteria are things that happen outside the project, such as a change in market conditions or the loss of a key partner.

Don't let your business case wind up as a static document gathering dust among the obsolete books on your office shelf. Instead, use it as a living document that allows stakeholders to know exactly where the project stands at all times. Not only will it help you sell the VALUE of your project, it will provide your team with a key decision-making tool, even as the project organically grows and changes direction.

For more on this topic, see Patrick Gray's article "The business case: What to do after the pitch."

I'm Jason Hiner, and this has been an episode of Sanity Savers for IT Executives. For more, go to sanity.techrepublic.com, or e-mail me at sanity@techrepublic.com. For those of you on Twitter, you can find me at twitter.com/jasonhiner. Thanks for watching. See you next time.