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/wp-content/uploads/2012/10/question_mark_4_151992.jpgWhen making a decision for investment, an organisation should systematically align on the expected outcomes of the considered initiative, to build a case for change.

Why? This exercise is the main key success factor for future project delivery (on time, on budget and on value).

Here are three simple questions that will support this alignment exercise and make it easier to drive: it’s all about strategy, benefits and risks.

  • WHY is this initiative important for our STRATEGY execution?

In other words, how is this project going to help us to go where we intend to go?

Answering this question is about considering the organisation’s ambitions, goals for the future, market differenciation, competition…. and identifying the contribution your project will have in supporting the realisation of these goals.

  • WHAT are the BENEFITS we can expect from this investment?

In other words, what benefits will we find over there (our destination)?

Identifying and estimating the benefits should cover qualitative aspects (such as visibility, reliability, auditability) as well as quantitative impacts. Quantitative benefits are either non financial (Customer satisfaction index, Days of Sales Outstanding) or financial (Cost reduction, Capital productivity, Incremental revenue and margin).

The financial analysis, to be complete, has to take into accounts both the cash in (financial benefits) together with the investment (CAPEX) and operations (OPEX) cash out needed to finance the project and maintain the “to be” platform. This part of the case is the Return On Investment analysis.

  • HOW are we going to mitigate the RISKS related to launching this initiative?

What could impair the success of the journey toward our destination?

Identifying the main potential roadblocks is not enough, the mitigation plan has to be designed to lower the predictable difficulties and set the ground to face unexpected ones. In an IT project, this part is mainly covered through a proper governance, the right expertise to support the realisation, and the application of the value management best practices (see SAP Value Management Center)

Poster 3 questions for a business case.pngAccording to my experience, building a business case for change is not that much a scientific exercise, as nobody can read the future, it’s much more about aligning stakeholders around a reasonnably rational set of assumptions, to agree upon what the current problem is, the way it can be solved and what it might bring back to the organisation.

At the end of the day, it’s both a science and an art: as summarised in this short scribing video I made for you (youtube)

I ll wellcome your comments and own views on this topic as a gift. Please react.

 

Photo credit: WingedWolf / Foter / CC BY-NC-ND

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