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The 6 Steps
In order to break away from the poor results that many business cases lead to, the authors developed a six-step framework for developing better business cases*. The six steps are:
1. Define business drivers and investment objectives.
2. Identify benefits, measures and owners.
3. Structure the benefits (the authors have developed a useful framework that identifies the types of business changes that will lead to a benefit and combines that with an assessment of what is known about actually achieving the desired benefit).
4. Identify organizational changes enabling benefits.
5. Determine the explicit value of each benefit.
6. Identify costs and risks.
While the authors go into great detail in their article about how to create this framework, I won't try to explain it all here (I recommend reading the article for the useful diagrams and explanations it offers). But I will point out a few of the author's observations about what is critically important to achieve successful project outcomes.
"An owner needs to be assigned to each benefit," said the authors. Now this may seem like common sense, but it is often neglected by unsuccessful organizations. And that individual should stand to personally gain from the realization of the benefit or represent the stakeholders who will benefit. It is also the responsibility of this individual to determine the value that will be placed on this benefit in the business case. That step ties the individual closely into creating a plan to ensure that this hoped for benefit actually takes place.
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As you know, placing a value on the "soft benefits" of IT investments is difficult. These soft benefits will not be sufficient to make the case for the investment, say the authors, but they should not be neglected or "trivialized" since they can go a long way in helping to change staff behavior.
The weakest aspect of managing IT investments is the evaluation and review of the anticipated benefits. Less than one-half of the organizations in the authors' survey actually do a formal assessment of the value of their IT investments. This post-implementation review was the strongest differentiator between the successful organizations in the survey and those identified as unsuccessful by the authors. If everyone involved in creating a business case for IT investments understands that a rigorous effort will be made at the project's end to evaluate the success of that investment, then future business cases will be far more thorough and should lead to more IT investments that actually deliver on their promises.
*Reprinted from MIS Quarterly Executive. Excerpted from Building Better Business Cases for IT Investments, Copyright © 2008 by the Management Information Systems Research Center (MISRC) of the University of Minnesota; All Rights Reserved.
Also of interest:
CIOZone Question: How would you evaluate the effectiveness of business cases at your organization done to justify IT investments?
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