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Business Case Analysis

Improve roadmap planning process with David Bowman’s information management guidelines for business case analysis

This site is designed for Information Technology professionals and management consultants who need to improve roadmap planning process and want guidelines for business case development

It provides a checklist of information management guidelines for business case analysis and a template to help jump-start a project.

What is a Business Case?

A business case is typically a presentation or a proposal to senior management seeking funding or approval for an activity, initiative, or project.

It specifies the rationale for proceeding with a data warehousing or business intelligence initiative and puts a proposed investment decision into a strategic context and provides the information necessary to make an informed decision about whether to proceed with the investment and in what form.

It is also the basis against which continued funding will be compared and evaluated.

Why is Business Case Analysis Important?

In today’s economy, it is very important that all investments be made in direct support of business needs.

Data warehousing projects can be very expensive in terms of money and other resources and it is important that proposals for each new project be evaluated in terms of business need.

A well defined business case provides management a means of monitoring project progress to ensure that it continues to meet objectives and does not diverge into other interesting things that the project team might find.

It clearly sets scope and expectations, which, if carefully managed, will minimize time delays and cost over-run.

Business Case Analysis Guidelines

Executive Summary

Should provide an executive summary that captures only the essential elements of the business case analysis being presented.

Business Needs and Desired Outcomes
  • Should describe the current environment and the organizational overview of the client sponsor;
  • Should contain a clear articulation of the business need in the form of a well-structured statement that addresses the problem or opportunity;
  • Should identify the business drivers that have triggered the investment proposal;
  • Should identify both internal and external drivers of change clearly linked to the business need; and
  • Should describe the high level business outcomes e.g. the expected result or benefit that the organization is striving to achieve at the end of the business change.
Strategic Alignment

Should demonstrate how the proposed investment fits within the organization’s broader strategic context and contributes toward its goals and objectives.

Business Need
  • Should reiterate the business need statement that addressed the problem or opportunity;
  • Should specify the key requirements to fully address the business case analysis need;
  • Should list and describe all the assumptions associated with the ability to address the key requirements and the potential impact of those assumptions if they are not addressed; and
  • Should list and describe the specific constraints that place limits or conditions on the investment. They can come from external or internal factors.
Scope
  • Should identify what is to be included within the scope of the investment and explicitly state what is excluded from the investment;
  • Should describe the stakeholder environment by considering the types of stakeholders, their specific roles, and their contributions to the realization of the investment.
Busienss Case Analysis Recommendation
  • Should define the evaluation criteria that will be used for screening and analysis of the options and will ultimately determine an overall recommendation;
  • Should identify, describe, and explore every possible option that can address the business need; and
  • Should provide an assessment how well each option meets the screening criteria.
Viable Options
  • Should describe how the option supports the organization’s current business architecture and planned program results and strategic outcomes;
  • Should prepare an option outcome analysis and present a summary of the findings for each business outcome;
  • Should provide a complete description of the costs based on total cost of ownership, which includes ongoing costs over the course of the investment’s life cycle as well as potential compliance costs for stakeholder groups.
Business Case Analysis Cost-Benefits

Should describe how costs are weighed against the benefits for each option taking into account costs, benefits, and risks.

Viable Option Implementation Considerations
  • Should demonstrate the capability of the organization to both deliver and manage the investment throughout its life span;
  • Should provide information concerning funding;
  • Should identify the core work streams and associated milestones.
  • Should include an impact assessment from both internal and external perspectives; and
  • Should describe the organization’s capability to successfully manage the investment.
Risks

Should identify the risks and conduct a business case analysis risk assessment for each option, along with the development of a risk response.

Justification and Recommendation
  • Should present the viable options, including the status quo option used as the baseline, and compare them against a standardized set of criteria e.g. financial and non-financial;
  • Should present the recommendation in a straightforward manner, clearly stating why the organization will benefit by focusing its investment on one particular option;
  • Should identify the deciding factors e.g. financial and strategic,  for selecting the preferred option;
  • Should provide a brief summary of the preferred option’s costing estimates and link them with the components of the work streams.
  • Should illustrate why the identified risks are acceptable; and
  • Should provide an implementation plan to demonstrate that the proposed investment has been appropriately thought through and that the estimates presented are within an acceptable degree of accuracy.
Investment Management
  • Should demonstrate where and how the proposed investment will fit within the organization’s broader governance and oversight structure;
  • Should demonstrate that the organization has and will apply a sound methodology to manage the project during its life cycle and through post-implementation;
  • Should provide an overview of the methods and processes that have been or will be implemented to gauge the project’s progress and how that progress will be communicated to the project team, project sponsor, and other stakeholders;
  • Should describe how the organization will address outcome management, i.e. tracking of outcomes, outcome owner engagement, outcome target metrics and time frames, and outcome reporting process;
  • Should demonstrate that the organization has a function in place to manage project risks;
  • Should describe how the potential impact of the proposed change on organizational culture, systems, and processes and on people working within and with the invested organizations will be managed in later stages of the project management process; and
  • Should indicate how the organization will address performance measurement for project implementation and benefits realization.
Business Case Template

Under Construction  

Business Case Analysis Review Guidelines
  • Should answer where are we now? by describing the current business environment;
  • Should answer where do we want to be? by describing business objectives;
  • Should answer what is the business need? by describing the problem or opportunity facing the organization and the associated proposed investment;
  • Should answer what has triggered the need for change? by describing the drivers for change;
  • Should answer what are we trying to achieve? by describing the business’ desired outcomes;
  • Should answer what is the alignment fit? by describing how the proposed investment maps to the organizational goals, priorities, outcomes, and policies;
  • Should answer how will we get there? by presenting the viable options, and associated costs and benefits, for detailed analysis and assessing them against the evaluation criteria that is used to determine an overall recommendation;
  • Should answer what is the best option? by making the case to recommend a preferred option based on its net advantages over all other viable options;
  • Should answer where and how will the investment fit within the organization’s broader governance and oversight structure? by describing the governance and oversight strategy for the investment;
  • Should answer how will the project be managed and reviewed throughout its life cycle? by describing the project management strategy for the investment;
  • Should answer how will the business outcomes be realized? by describing the outcome management strategy for the investment
  • Should answer how will the business risks be mitigated and managed? by describing the risk management strategy for the investment;
  • Should answer how will change be managed and implemented? by describing the change management strategy for the investment; and
  • Should answer how will performance be measured? by defining the project implementation and benefits realization performance measurement strategy
Summary...

A business case is typically a presentation or a proposal to senior management seeking funding or approval for an activity, initiative, or project.

It specifies the rationale for proceeding with a data warehousing or business intelligence initiative and puts a proposed investment decision into a strategic context and provides the information necessary to make an informed decision about whether to proceed with the investment and in what form. It is also the basis against which continued funding will be compared and evaluated.

This site provided a checklist of information management guidelines for business case analysis and a template to help jump-start a project.