A new framework for IS-Business Cases

22 Feb

Introduction

We have chosen to begin our framework by introducing a Business Canvas to introduce the successful components of a business case. They are outlined as;

  1. Drivers
  2. Objectives
  3. People
  4. Change
  5. Benefits
  6. Costs
  7. Risks
  8. Post-Evaluation.

Business Case Canvas

 Mobile phone company that is experiencing increased customer defections caused by a combination of service failures and the extended product and service offerings of competitors.

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We believe that with any framework or business model undertaking including both frameworks and ERDs, the firm should also implement the Canvas as a tool of monitoring finances, customers, targets, goals and potential hazards of the model can be identified in the primary stage of development, an important feature to help to maintain the success and alignment of any implementing model.

Figure X: Developing a successful business proposal.

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1) Drivers

Our framework begins with the drivers of the IS business case. Drivers are required in order to make decisions and set objectives for a business. They do this by providing a foundation for setting goals in order for a business to strive and have targets to hit.

These drivers consist of both internal and external drivers. The internal drivers are the situations or events that occur inside the business, and are generally under the control of the company. Some examples of these are:

  • Management Systems
  • Financial Management
  • Employee Morale
  • Reducing customer fall-off

The external drivers, on the other hand, are the events and situations that occur outside of the company and are usually beyond the control of the company. Some examples of these are:

  • Economy
  • Demographics
  • Competition
  • Political Interference

2) Objectives

After the drivers have been identified, the framework progresses to identifying the objectives of the business. These objectives are usually aligned with the drivers and are specific to the company. There are three primary objectives for a business case:

  • To present decision-makers with key information about a business proposal in a consistent, balanced format that facilitates the evaluation, comparison, and prioritising of competing initiatives.
  • To guide teams in developing their vision and plans to prepare for an upcoming project.
  • To ensure that resources are allocated based on a sound business rationale and consistent with the priorities of the sponsor organisation.

3) People

This involves including a diverse range of skills, departments and people. The Belbin personality test will ensure a broad range including creative types, leaders and the conscientious dissenters which ensure the creation of a fair and balanced IS-business case.

The role of the manager/leader is paramount. The smart leader though involves other actors from outside the IS sphere benefits and problems arising are shared out amongst the user community. This is achieved by involving all departments of the firm and by aligning the needs of these departments with that of the business case. Support for the business case is also built through this method.

By involving the right mix of both technical and non-technical you are spreading the importance throughout the firm

4) Change

Before the implementation begins business cases must highlight potential conflicting interests, resistance/immunity to change and general office politics. For instance if the workforce is heavily unionized then chances is that there will be heavy resistance to any IS automation of processes. Business cases must take this into consideration when justifying the investment.

All business cases must be made in the context of the firms current environment, its organizational culture resistance to change is a natural reaction from a workforce proper transparency and communication can alleviate this problem while the necessity of the investment and the overall vision must be made clear to employees.

  • People change
  • Process change
  • Organizational change

5) Benefits

Having agreed on the objectives of the investment, what users to involve and planned for change, management must now identify the expected benefits that will arise if the objectives are achieved. These are the advantages provided to specific groups or individuals as a result of meeting the overall objectives. For most investments, meeting each of the objectives will usually generate a number of benefits to many different groups of users. Once the expected benefits from the investment have been identified, they can be managed by:

a)      Deciding how the benefit can/will be measured; and

b)      Attaching an owner to the benefit.

  • All financial benefits are the result of applying a financial value to a proven quantifiable benefit. For example, projected positive financial outcomes as a result of achieving an objective – such as cost savings or increased profits – are readily accepted as business benefits and are easily expressed in financial terms.
  • Non-financial or non-quantifiable benefits must be translated into something that has some financial value or meaning. For instance, customer satisfaction is commonly referred to as being a “soft” or “intangible” benefit due to its inability to be directly measured.
  • These non-financial benefits will be expressed as a financial value through their measurement value expressed within already identified KPIs; through existing tangible measures such as customer satisfaction survey scores, customer retention rates and so on; or through methods such as piloting and external benchmarking.
  • Making individuals – particularly those in senior positions within the organisation – benefit owners not only builds commitment to a project but also demonstrates the importance of the investment, adding weight and reputation to the business case. This owner ideally is an individual who personally gains from the benefit or represents the interests of the user group that gain from the benefit. This owner thus is willing to closely assist the project team in ensuring the benefit is realised.

6) Costs

Costs can be divided in to five sections:

  • Purchasing costs which deals with initial purchase of software and hardware like licence fees and telecommunications.
  • Development, the cost incurred here occurs when training up staff and developing programs and systems to meet the needs of the firm, given the uncertainty often surrounding I.S. projects this element often overuns.
  • Infrastructure both internal and external costs occur through the changes that must occur to accommodate the system.

It is important to also include recurring costs associated with the new system once it goes live. Cost of changes must also be included and are often the most elusive because they are so difficult to predict particularly when there is a wide variety of stakeholders involved.

7) Risks

One of the primary risks with any framework is the fear that the overall framework results in loss of alignment with the company goals and targets. To prevent such measures it is strongly recommended that any business case be continually monitored in relation to the initial objectives and ensure alignment. Simply ensuring continual monitoring can help decrease any degree of risks by identifying problem areas at an early stage.

One method that could prevent risks becoming problematic may be to carry out Risk Assessments at regular intervals. The assessment helps to identify risks associated with specific pre-determined circumstances unique to the company as well as giving recommendations of how to alleviate the issues before they become a significant issue

  • Technical Risks- The overall difficulty in determining the boundaries of the system.
  • Organizational Risks- Leadership absence with little to no senior or ministerial responsibility being designated.
  • Lack of communication between associated stakeholders, lack of team integration and issues between business users, technicians and clients.
  • Misalignment between firm’s strategic targets and the overall priorities of the framework with no agreed measures of success.
  • Financial Risks outlined in costs below but also the project runs the risk of significant overrun potential derailing the entire project.

8) Post-Evaluation

A final note should be considered for the post-business case stage. Evaluation of the effects of the initiative after it has been implemented is a key element which is sometimes overlooked in preparation of a business case but is vital in transferring the lessons learned to new projects. Without post-implementation evaluation of the proposal the business case is not complete.

Conclusion

The difference between a good business case and a bad one is pretty easy to spot. A good one involves multiple players, tangible metrics, constantly updated and reviewed and is employed as a touchstone for decision-making concerning things such as budget, benefits, costs and key drivers. Business cases aren’t a box ticking exercise, they uncover hidden costs, agendas, preconceived notions all designed to stimulate discussion and create informed decision making. With the framework we have created we believe that brings the dispirit elements of the IS-business case together to offer a comprehensive step-by-step guide as to how management teams can create successful business cases.

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One Response to “A new framework for IS-Business Cases”

  1. Nkosi May 18, 2017 at 8:08 pm #

    This is very true . Good framework for a Business Case

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