Are you finding it difficult to get the executives in your organisation to buy into the need to use a new software platform, whether it is something like Microsoft 365 or a system like an ERP, Document Management or Financial? We find that the business case is a good way to achieve this.
In many of our clients’ organisations, the IT Department is seen not as a strategic business driver, but a support department, grudgingly resources to “keep the lights on”.
It’s no wonder then that executives don’t realise how powerful technology could be, it doesn’t even feature on the EXCO Strategy radar. The challenge now is to get the full potential of technology onto the executive agenda.
We have found the business case an effective way to get executive attention.
A business case clarifies the value of any opportunity. It is the single most important document in gaining commitment to any opportunity.
A business case is part Sales, part Marketing and even part Management Accounting. It represents the opportunity to present a compelling justification for funding an investment to achieve the organisation’s mission, goals and objectives. An effective business case generates the support, participation and leadership commitment required to transform an idea into reality.
A business case identifies an opportunity. It provides context and content, clarifies the financial ratios and describes the desired objectives and outcomes in terms of the business. It describes how and who will be affected. The how and who typically evolve not around individual or organisation behavioural changes, but also the bottom line and shareholder reporting.
The business case will break out specific alternatives and their associated impacts in terms of profitable growth, competitive advantage and productivity. A strong business case for an investment puts that investment decision into the strategic context and provides the executives with the necessary information to make an educated decision.
Putting a business case together
The IT Department of the future is going to become the strategic backbone of the organisation and significantly impact on our effectiveness, efficiency and the way we do business. But we have little historical evidence and case studies which have quantified the improvement brought about by this function.
Traditionally, innovation occurs in products, processes or business models. The latest thinking has been well researched by Gary Hamel in his work The Future of Management. The new technology that is made available by quantum computing, Data and Business Intelligence, security, AI, powerful workflows, digital architecture, speedy processing is not only a new tool, but it also enables new ways to compete in business. For this reason, we cannot use the past to forecast the future. Our best attempts to make a case for some of the new software capabilities are going to have to be around describing the intangible business “steroids” such as on the Balanced Scorecard (Kaplan and Norton), which lead to business improvements.
You need to put a business case together to justify the resources and capital IT investment necessary.
The Business Case is usually primarily a financial document; however, we have to be creative about gathering evidence of what differences these new tools can make and there are so many permutations that it is difficult to quantify the financial implications. We therefore have to modify our approach to developing the business case to examine at those variables as proxies which enhanced by the Technology capabilities, will deliver on the organisation’s business objectives.
We find that the best approach is to:
- Understand the organisational objectives and identify where technology could support delivery, can we make a case for enhancing client lifetime values by speeding up deliveries? Could we show that the Net Present Value of the Investment is more favourable to the business than another investment? What about updating and speeding up processes and reducing wastage?
- Analyse the internal variables (culture, competence and processes) at a high level, which could influence the successful attainment for the business objectives;
- Look at what is happening in the competitive landscape;
- Identify relevant best practice which is enhanced software such as compliance, governance and cyber-security and significantly mitigate real organisational risks;
- Actively look for case studies on similar technology implantation in both the same industries and others; and
- Make recommendations for the prioritisation and roll out of the Technology optimisation strategy.
We document all the relevant facts and link them together into a cohesive story. This story tells the executives about the what, when, where, how and why.
- Why is the project needed?
- How it will solve the issues or opportunities facing the organisation;
- How the solution addresses the issues or opportunities (benefits);
- What will happen to the business if the project is not undertaken (the do nothing scenario)?
- Priorities and timing;
- An indication of how much money, people and time will be needed to deliver the solution and realise the benefits: and Suggested Metrics for quantifying success.
By documenting everything together in one story, it is easy to link the issues to the solution and the benefits and identify where the organisation would be without the project.
The development of the overall business case also identifies holes or problems with the solution. Moreover, the organisation will have a way to measure its success. This analysis is also useful for the leadership team to prioritise this project against the many other initiatives that require capital investment.
The business case provides a consistent message to many different audiences. As a high-level view of the entire project the business case manages the expectations of all the stakeholder divisions affected by the project (customers, management, operations, research & development, service, sales, accounting, finance, etc.).
The length of the business case should be kept to a minimum, ensuring it stays on topic, presents relevant information in a clear and concise manner and it be focused on supporting management in making decisions.
Digital Bridges enhances the Return on Technology Investment by approaching IT from a Strategy, Business and People perspective. For assistance with your Digital Strategy, Business Analysis and Change Management, please contact Kate@Digital-Bridges.co.za
