Developing A Business Case

Developing A Business Case

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  Page 1Classification: Restricted BusinessAnalysis Training Developing a Business Case
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  Page 2Classification: Restricted Agenda •Why do we develop Business cases? • Key components of a Business case • Importance of identifying Benefits • Role of the Business Analyst • How we can integrate Benefits to the business case • Setting the foundation for the rest of the project • Questions & Answers
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  Page 3Classification: Restricted Whydo we develop Business cases? • A business case is : “a document that describes the necessary information from a business standpoint to determine whether or not the project is worth the required investment. It is commonly used for decision making by managers or executives”1 1PMBOK® Guide, Fifth Edition, p. 69 PMBOK is a registered mark of the Project Management Institute, Inc. • It can originate from various part of the organisation but it is usually developed during the Enterprise Analysis effort. • It helps determine which projects/initiatives the organization should undertake.
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  Page 4Classification: Restricted KeyComponents of the BC A Business Case traditionally includes: • Executive summary • Project description • Purpose and background • Scope / high level solution requirements • Assumption, dependencies and constraints • Risks • Project Economics • Economics indicators: ROI, IRR,… • Estimates used for developing the indicators • Proposed Project schedule • Appendixes But often developing a business case means focusing mostly on justifying the initiative on financial grounds: – Is the expected annual percent return on investment acceptable compared to alternatives?
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  Page 5Classification: Restricted Howdo we assess project success? • On time, on budget and as per scope. • Deliverables are completed and accepted. But in reality what an organisation wants to know is how well the project delivers the expected business value / are the expected benefits realised?
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  Page 6Classification: Restricted Importanceof identifying Benefits By focusing on Benefits, at the time when we are developing the business case, we can: • Start with the end in mind (what do we hope to realise? What is the value expected?) • Align the initiative/project with the business strategy • Clearly understand the “true” value of the initiative • Ensure the organisation has an effective business case – not just a justification for an investment opportunity • A benefit is : a measurable improvement which contributes to one or more organisational objectives.
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  Page 7Classification: Restricted Criticalrole of the Business Analyst? The Business Analyst can contribute to making a more effective business case, by identifying the expected benefits, based on his/her: • understanding of both the organisation’s strategy (including the enterprise architecture) and the organisation’s operations. • ability to act as a liaison among all stakeholders. • business analyst’s tools and techniques. • unique insights into both the problem/opportunities and the solution requirements.
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  Page 8Classification: Restricted Howto integrate Benefit targets to the Business Case • Identify benefit targets that will contribute to at least one or more strategic objectives • Be realistic and focus on tracking the metrics that matter • Define clearly the metric to be used and establish a current baseline • Set and agree targets at each milestone for each benefit and each benefit owner • Can be measured in either monetary or non monetary terms – be creative on the non monetary
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  Page 9Classification: Restricted Examplesof Benefits and metrics • ERP Implementation project: • Deliverable: ERP system implemented • Benefit targets: • Greater Stock accuracy : Real time stock value, reduction of the level of discrepancy between stock level and actual stock from 5% to less than 2%,… • Reduce time taken to do the monthly account closure from 6 days to 3 days • Internet banking application for smart phone – Project deliverable: a secure internet banking phone apps – Benefits targets: • Increase market share by 10% in the 18 to 24 age group • Improve visibility of the brand, easier access to information, increase customer satisfaction,….
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  Page 10Classification: Restricted Whatis required to make it happen? • Ownership is key • Do not reinvent the wheel – use measure available • Use more than one measure • Be outcome driven • Do not just limit in delivering the benefit but in maximising the benefits.
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  Page 11Classification: Restricted Setthe foundation for the rest of the project Benefit targets will then be used to: • Give direction for the project team and stakeholders • Give focus on what need to be achieved • Support when changes happen to make right decision • Go beyond project completion The Business Case become the strategic driver from project initiation to project execution to long term operation. It supports the strategy implementation and measure the “true” success of a project.
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  Page 12Classification: Restricted Conclusion “Ifyou want to build a ship, don’t drum up the men to gather wood, divide the work, and give orders. Instead, teach them to yearn for the vast and endless sea.” Quotation from Antoine de Saint-Exupery
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  Page 13Classification: Restricted ThankYou!