Business cases for IT investments are often developed quickly—because of an urgent need to address strategic objectives, or cost-cutting, or migration to a cloud environment. However, the rush to prepare and gain approval of a business case carries significant risk and, if poorly prepared, can hang like an albatross around the neck of the executive sponsor and investment manager for years.
The business case, including its many supporting components, will provide the framework for the project or program investment throughout the entire lifecycle. That’s either good or a nightmare, depending on how well the business case is prepared.
The Problem
Take a look at the PMI Book of Knowledge™, and you will see that there are many pieces to the puzzle, and they must all fit together. In addition to PMI processes and integration steps, there are additional dimensions to a well-prepared business case:
- Identifying expected strategic outcomes including measurable indicators of success
- Streamlining business processes
- Harmonizing the investment with “to be” Enterprise Architecture
- Exploring strategies for cost reduction
- Reviewing inputs necessary for establishing the Performance Measurement Baseline
- Defining “agile management” is embraced for this investment
- Identifying supporting documents needed for the enterprise’s System Life Cycle documentation.
Developing a robust business case requires a strategy to incorporate all of the necessary elements. During the early stages, it is helpful to be open to options—and not just the solution(s) that are most readily available.
The Solution
The first step, of course, is background review and a Project Charter. While not a formal part of the PMI process, we believe that it is important to lead the Business Sponsor and the Integrated Project Team (IPT) through an early process that includes:
- Expected Strategic Outcomes
- Concept of Operations
- Preliminary identification of alternative business and technical solutions
- A Road Map for developing the business case (i.e., a task plan).
One of the best ways to accomplish these early processes quickly is to conduct a Business Case Planning Workshop with the Business Sponsor and the IPT. In addition to discussing the processes mentioned above, the workshop will also assign responsibilities regarding who provides inputs for:
- The detailed scope of the investment including Work Breakdown Structure (WBS)
- Risk management and data for risk-adjusted costs
- Time management and integrated master schedule (IMS)
- Cost estimating including for alternatives
- Acquisition planning and management
- Quality management
- Stakeholder and communication management
- Resource and staffing management
- Definition of “Agile Management” if applicable to this investment
- Integrated master plan (IMP) for lifecycle
- Pre-IBR Performance Measurement Baseline and Earned Value Management plan
- Business case documentation
In addition to assigning responsibilities for the business case, there should also be a detailed schedule. A detailed business case also generates a need for a variety of documents:
- Business Case
- Statement of Work, WBS, and technical milestones, including for alternatives
- Alternatives and Cost-Benefit Analysis
- Risk Management Plan
- Acquisition Plan
- Time-Phased Budget
- Integrated Management Plan
- Exhibit 300 (if Federal agency).
We recommend that the entire IPT review all deliverable and inputs, to make sure everything is realistic and fits together. The reviews should be done at the draft stage, so that refinements may be made to all documents. The final output should be of a quality that can be submitted for an Integrated Baseline Review.
What’s New
Cloud computing has generated a need for new business cases. Many of these replace one or more legacy systems.
There is a trend away from consulting firms preparing slick and expensive turnkey business cases for client enterprises. Business cases that become successful projects and programs need the in-depth involvement of your enterprise's executive sponsor, stakeholders, and IT team.
QT Plan
This task will require 3 – 4 months, depending on the availability of information and the schedule of the IPT. Milestones are as follows:
- Entry meeting to discuss task and scope, and to collect background documents
- Define Project Charter including IPT, if not already available
- Draft preliminary task plan for Business Case
- Convene workshop with Business Sponsor and IPT: conduct preliminary discussion, assign responsibilities, establish schedule
- Finalize task plan for business case
- Commence research and planning
- Brief Business Sponsor and IPT about findings and proposed approach to Business Case
- Prepare draft Business Case and supporting documents (may be phased into several stages)
- Convene IPT to review draft documents (likely to require several meetings)
- Prepare final Business Case and supporting documentation
- Finalize Exhibit 300
- Gain acceptance and closure with Business Sponsor and IPT
- Closeout task.
Reference
See PMBOK Guide (© 2013 Project Management Institute), Fifth Edition.
Integrated Baseline Reviews, P2C2 Group, Inc., 2013.
More Help
Jim Kendrick and the P2C2 Group, Inc. provide Facilitator/Coach and Subject Matter Expert services in this Quick Task area: kendrick@p2c2group.com. This includes experience with cloud computing.
Last Word
Business Cases should be durable and provide the foundation for the entire lifecycle and provide a framework for change and investment evolution.
