When is a business case not a business case (part two)

Read part one   part two Read part three  Read part four

In this section I will be talking about benefits, why they are so important to the business case and how they can be tracked right through the project, thus making the business case  a key document in successful project delivery, rather than just a tool to get the budget released.

Benefits map diagram expains the bridger method of mapping requirements to benefits

The model above illustrates our basic theory of benefits delivery.
On the left side of the diagram, we represent high level requirements.
This is intended to illustrate the level of requirements that is generally outlined in the business case.

This requirement is then tied indirectly to the composite benefits illustrated on the far left of the diagram. These benefits are the ones providing the key arguments for action.
That part of the model is very simple and intuitive. We have high level requirements and we expect to deliver the identified benefits.  The denotes that this metric is to be measured.

A key element of this approach is to remember at all times is that the requirement exists in the business case only to deliver the identified benefits and any change to the requirement or surrounding circumstance that impacts it’s ability to deliver these benefits is a red flag issue and must trigger a business case review.

The devil may be in the detail

 Between the high level requirement and the composite benefit, naturally, lies a lot of very important detail.  While this detail is not represented in the business case, but in other documents such as requirements specifications and benefits realisation plans, the exploration and bottoming out of this detail, will be critically important to the final conclusions of the business case process.


We look at this benefits mapping activity in terms of feature level requirements I.E. identifiable succinct features of the product or deliverable and with this we associate two things:

  1. The measurable benefit that is expected as a result of this feature, along with a suggestion of how it might be measured.
  2. The risks management attached to realising this benefit.  We describe it as risk, because we want to confine the change management activities to those that are necessary in order to deliver the benefits.

By taking this approach, we are proactively testing the likelihood of our successfully delivering the benefit and we are planning the change activities required to ensure that they are delivered.

Benefits realisation example

E.G. In the CO2 example, we may have assumed a fuel saving of 1000 gallons per month resulting in a measurable reduction CO2 emissions.
In order to actually realise these benefits, we might have to take steps to ensure that all the lean cars are not last to be taken from the car pool, while the big luxury ones are first choice. The approaches can vary considerably, but they have to be planned and in many cases included in the costs of the project.

Without this risk assessment and change management activity, the likelihood is great that the potential impact of replacing luxury cars with lean ones will deliver little or no benefit to the environment or to the organisation, No ROI and a project failure.

Now if we look again at our diagram, it may become obvious that we will have quite a few of these feature level requirements and that each will have it’s own mini business case including the level of ROI and the level of risk attached to delivering benefits.

 As the project takes shape and more is learned about each of these requirements, this mini business case needs to be constantly reviewed and updated so that poorer candidates can drop off the radar and stronger ones get promoted to a higher priority.

Approaching the business case in his way and continuously managing it as the development continues from outline business case to full business cases will keep the business in control and minimise the likelihood of pursuing projects that perform below expectations.

 Read part one   part two Read part three  Read part four

 

When is a business case not a business case?

Read part one   part two Read part three  Read part four

  1. When it establishes that there is no case for the proposed initiative.
  2. When it fails to identify and present the benefits of the propsal sufficiently well to win support.
    Both of these situations have the same result only the second one is a lost opportunity for the business.
    A process for deveoping the business case for IT change

You can talk to five different people who have that word in their CV and each one will probably have a different take on what a business case is for, who should prepare it and what it should contain.
In fact, you could say that  the whole science around business cases, especially those involving IT investment has moved on substantially in the past two or three years.

Many of the concept of benefits were rarely discussed ten years ago, let alone benefits realisation.  Today all that has changed. Some examples of the importance this subject has achieved is the Cranfield university  Benefits Dependency Network Tool  and more recently the Microsoft REJ framework.
Here is a simple explanation that takes into account more recent developments in thinking and puts a simple framework around what a business case is and is not.
1. A business case must live up to billing and make a case for the proposed project. That means demonstrating how the project will deliver benefits for the business
2. A business case should take three forms,
a. Initially it should be an outline business case. This is a non detailed and very tacit explanation of why some very knowledgeable stakeholders feel that this is a very good idea.
b. A full blown business case with detailed cost benefit analysis and detailed financial calculations such as ROI, EVA, IRR,NPV etc
c. A one page summary of the final business case for people with little time for detail.
3. A business case must take a analytic view and not be an excuse to purchase my new toy, hence it should examine tactical solutions and doing nothing.
4. A business case should take into account political ,economic, sociologic and technologic trends likely to impact on the projects ability to deliver
5. It should take account of the organisations ability to deliver the project and realise the benefits.
6. The business case should always be a living document that is carefully managed by someone who carries a key responsibility for the project.

The diagram above shows a simple process for producing and managing a business case.
The top section represents the activities that generally occur prior to going into the implementation phase of the project .
The bottom section represents the activities that continue during and after implementation.
The first priority is to expand a little on the initial concept and capture high level requirements.   In dong this it will be key to get an understanding of the benefits hoped for by stakeholders and to abstract form them the knowledge and experience that has lead them to this conclusion and the assumptions that are underpinning it.
Next a high level examination of the potential solutions, include the ones that are likely to be already suggested, a do nothing scenario and a tactical solution.
From here an outline business case can quickly be created that encapsulates all the motivations, expectations and tacit understanding of the problem and potential solutions and provides a building block for stakeholder mapping.
In the next instalment we will look at some of my favourite tools for helping to create a business case that serves it’s purpose.

Read part one   part two Read part three  Read part four

 

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