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Frequently not enough attention is given to producing a comprehensive business case or to producing an economic justification for an information systems investment. In fact many organizations are not clear as to what constitutes a sound business case and how to go about producing one. This Professional level book for the Computer Weekly Professional Series will show how to go about justification for I.T. spend.
This book is designed for all those who are involved in the decision to invest in information systems. This book is especially relevant to senior business executives, senior financial managers and IT executives.
Business consultants, computer and corporate advisors will also find the ideas and material addressed in this text of particular benefit as will anyone involved in corporate and strategic planning.
In addition, senior students such as those working towards their MBAs will find this book of use.
A business case is a statement or a series of statements that demonstrate the economic value of a particular intervention, a course of action or a specific investment. A business case is not simply a financial forecast of the hardware and software costs and the expected benefits. A business case for an information systems investment involves a comprehensive understanding of both the likely resources as well as the business drivers which will assist business managers improve their performance and thereby obtain a stream of benefits from the investment.
In general there are approximately six steps in producing a business case for an information systems investment.
1. Determine the high-level business outcomes that will be clearly and comprehensively expressed as a set of opportunities the organization can take advantage of, or problems that need to be rectified.
2. Identify the corporate critical success factors that will be supported or enhanced by the operation of the completed information systems project or investment.
3. Create a list of specific and detailed outcomes or benefits, their appropriate metrics, measuring methods and responsibility points that are represented by the stakeholders.
4. Quantify the contribution made by the outcomes, which requires associating numbers or benefit values with outcomes where this is possible.
5. Highlight the risks associated with the project.
Fundamental to this new approach to developing a business case for information systems investment is the fact that it incorporates much more than the financial numbers which are typically found in the standard approach to a feasibility study. This approach looks behind the financial numbers to the improvements in business performance which are facilitated by information systems and which are the real drivers of the benefits. Furthermore, this approach to developing a business case allows the organization to manage the process so that the required results are achieved.
- Sales Rank: #2041562 in eBooks
- Published on: 2012-05-16
- Released on: 2012-05-16
- Format: Kindle eBook
Most helpful customer reviews
12 of 14 people found the following review helpful.
Business case development done right - highly recommended!
By Mike Tarrani
The primary audiences of this book are: (1)IT governance boards for whom the summaries at the end of each of the eleven chapters will provide ample information, (2) program management offices, which can use this book as the basis for business case standards, policies and procedures, (3) upper IT management who will greatly benefit from the skillful blending of strategy and cost management, and who will also get excellent ideas about how to better support their business customers, and (4) project managers. For the last group this book represents a valuable resource - PMs managing projects in accordance with the British standard called PRINCE2 will have a ready made reference for business case development, which is a requirement for the Managing Stage Boundary (SB) process, and those who are working within the U.S. standard defined by the Project Management Institute's Project Management Body of Knowledge (PMBOK) will find that this book will greatly augment the scope knowledge area and associated processes.
Each chapter follows in a sequence. Chapter 1 introduces the author's model and how it will benefit you. Pay close attention here because chapters that follow require hard work and commitment from many stakeholders. This means resistance, and you'll find the material here useful if you wind up in the odd position of making a *business case* for implementing a business case methodology.
Chapter 2 covers preparing a business case. I like the way the author breaks down the elements of an IT business case and how it's cast into a process. The next chapter discusses how to objectively evaluate a business case and is another highlight of this book. Strategy and analysis are blended in Chapter 4, which covers the business outcome. This chapter has some interesting approaches, including the development of a macro model (with an example provided), and how this is decomposed into micro models that examine factors and assumptions from which to derive a quantifiable business benefit. What makes the approach here so interesting is the relationships between and among the micro models are also carefully examined using a "Meso" model (this model type is commonly used to analyze complex physical interrelationships in weather forecasting). Common sense needs to be applied here - you will not use the entire array of techniques to support a minor project. On the other hand, a strategic decision like web-enabling an enterprise or a high-value e-commerce initiative certainly should be subjected to the painstakingly detained process given in this chapter.
Stakeholders, strategic alignment of IT to business and technology issues are the topics of Chapters 5 through 7, each of which contains essential information for implementing the author's business case approach. Project managers will greatly appreciate the material in Chapter 8, which covers risk identification and management. I like the 3x3 IT project risk framework provided. Chapter 9 is a thorough treatment of business case accounting (also known as cost/benefit analysis). Here Mr. Remenyi dissects the topic with precision, covering cost items, estimate sources (cost and benefit), and a number of analysis techniques. This is one of the best chapters in my opinion.
Chapters 10 and 11 are devoted to evaluating, weighing and prioritizing business cases, and how to effectively use business cases in conjunction with project management. The latter is completely consistent with the PRINCE2 method I mentioned earlier. The remainder of the book consists of a case study, and appendices that provide an extensive collection of questionnaires and forms, and a nicely done description of financial measures used in cost-benefit analysis.
It all boils down to whether or not you are serious about developing business cases and doing them right. If you are this book is essential. I give it five stars for thoroughness and the added value of more forms and checklists than I've ever seen collected between two covers.
0 of 0 people found the following review helpful.
Decent Framework - Needing Substance
By Wesley E. Withrow
This book is definitely a good read for the general reference or framework to use as a resource. This was a required book for a course I was taking in IT Budget and Financial Management and it was more of a reading assignment than a good book to reference. The chapters are short which keeps the attention span in tact, however, there isn't much substance that provided the guidance or real world examples that is normally expected.
I would recommend this book to keep as a reference to reach back to, but if you are looking for depth and breadth this is one to pass on.
2 of 3 people found the following review helpful.
Superficial
By Christoffer Swanstrom
The book is quite superficial, it states the obvious and does not go enough into detail in order to be of any practical value.
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