A Conceptual View On The Business Case

Eighty-six percent of IT decision makers are convinced business cases are an important instrument to gain value out of investments. Hence they are often used to convince organisations to invest in IT projects. But, once the money is granted, there’s no feedback to the business. “Business cases should be a management instrument”, said UA’s Prof. dr. Steven De Haes at our latest CIO Speaker’s Café. “The more mature your business case process, the better your outcome. That’s why we need a process view on the business case: from development over maintenance to review. It is only by measuring results that you can know if your objectives have been realized, and the investment has been successful.”

1. Development: building the business case

Even in the development phase, it goes wrong many times. “Often, business cases are owned by the CIO or senior IT whereas it should be a process owner’s work. Or one looks too much at IT costs, not at financial impact for the business such as reengineering sales investments. Or the editor focuses solely on return on investment. There are too many intangible benefits in IT projects. If you always try to calculate revenue in euros, you might miss strategic long-term transformation that you cannot quantify. Sometimes you need a bit of entrepreneurship”, Steven De Haes said.

2. Maintenance: update the business case

Now that you have the money thanks to your business case, use it as an instrument to steer your project or process. Once launched, it’s okay to alter the business case en cours de route. Find ways to track intermediate benefits towards your end goals, do not only monitor costs. Also: as business moves on, your business will make assumptions and need transparency. If you have an operational instrument, it will be much easier to manage these assumptions and perhaps update the business case adequately based upon your intermediate reviews or assumptions.

3. Review: evaluate the business case

According to a UA survey, IT organisations appear to be good at defining investment objectives (if it’s difficult to define investment objectives, there’s something wrong with your investment), at identifying and tracking costs, but not at evaluating the business case nor at calculating investment effectiveness. “People often forget to evaluate their investments. They say it’s important, but agree they’re not good at it. By using a clear management framework, you will have accurate and objective data for both positive and negative outcome. Should you for instance find out you’re not realizing your objectives, you’ll have the objective reasons to convince decision-makers to dare to stop”, Steven De Haes concludes.

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