Many business cases are not based on adequate evidence that prove the value of the benefits claimed or the likelihood of them being realized. In most cases, benefits are overstated to gain approval. Research also found that the quality and comprehensiveness of business cases has a significant effect on the success of IT investments - Ward, Daniel & Peppard, 2007.
These days, every organization recognizes the importance of IT and understands just what a big impact it can have on their productivity and output. Also, a lot of work is accomplished solely through the use of computers, such as managing communication, updating spreadsheets and writing documents. IT Projects are launched for a variety of reasons like compliance, cost saving and revenue increase, to mention a few. IT is such a crucial component in most business models that we are actually starting to see entirely paperless offices that don't require any printed or handwritten documents.
Despite the wide acceptance of the importance of IT, a lot of companies are still failing to reap the benefits of investing in it. This is because there is a common problem that runs deep in most organizations: ICT investments are not backed by adequate research. Investing in ICT resources is a common way of applying band-aid to business issues, but this does not address the root causes of problems and does not help to maximize effectiveness.
Business analysts are often required to develop business cases to justify the implementation of IT solutions. The research conducted by Ward, Daniel & Peppard in 2007 (see reference) recommends that analysts stop viewing the business case as a way of obtaining funding for their projects. The business case is so much more than that:
- It should show how the desired outcomes depend on planned changes and technology
- It should be seen as a tool for gaining commitment from stakeholders
- It should explain how IT and business changes will deliver benefits; and
- It should be used as basis for the evaluation of the proposed benefits when the solution has been implemented, that is, it should be used for an objective assessment of whether the proposed solution is viable or not.
Against this backdrop, here’s a summary of how to ensure that your company actually gets the most out of its IT investment.
1. Do Your Homework
Where your recommendations are based on a technical solution, ensure that the business case is backed by sufficient data and analysis. Start by familiarising yourself with technology options and evaluating your current capabilities to make recommendations for future capabilities. What this will allow you to do is be able to advise the business on how to use technology to exploit any existing opportunities. See How Technical Should Business Analysts Be?
Chances are that sufficient research will allow the business grow much faster than its competition, which in turn implies that employees will be able to work more quickly and efficiently. Doing your homework on technology can give you the edge that will help you make recommendations that help the business achieve its objectives.
In addition, find out how other companies have reaped benefits from similar technology implementations. This will help to ensure that the recommendations you make are guided by reviews/feedback of similar implementations. The technique to apply here is known as benchmarking, which is useful in identifying potential business improvement opportunities by evaluating best practices and processes within the industry. Care must however, be taken when using this technique as the circumstances and peculiarities of implementation often vary from organization to organization.
2. Identify the Business Pains and Purpose of the Investment
The business case should highlight the issues facing the organization that have led to the need to implement the proposed solution. Recommendations should always be linked to the goals of the organization.
3. Identify Benefits, Measures and Owners
The benefits (desired outcomes) that will arise as a result of fulfilling the business need should be clearly stated. Benefits are specific to each stakeholder group and should be outlined separately so that it is clear what is in it for everyone.
4. Identify Costs and Risks
In addition to the cost of implementing the solution (testing, implementation, maintenance & support), associated costs related to business changes should also be included. All factors affecting the selection of a solution such as cost, time, skill sets, etc, should be taken into consideration. When the costs and risks associated with implementing a particular solution are clear, management would be able to make informed decisions.
5. Consider Multiple Alternatives
Analysts have a critical role to play on software projects, from analysing alternatives, developing software specifications to validation of the solution when it has been implemented. Don't just wait on Microsoft or Apple to make you the software tools your business needs. Consider in-house development, outsourcing, SaaS applications, upgrading existing software or extending the functionality of existing software, as viable alternatives that can be assessed for suitability. Remember that doing nothing is also an alternative.
Be aware that not all problems require a technical solution. In some cases, it may just be that existing systems are not being utilized properly. Ensure that staff training is comprehensive and continuous, especially if the organization practises regular role exchanges. A comprehensive business case with an effective strategy for achieving business change is key to ensuring that you do not spend lots of money on a new IT setup only to find out that employees are not using it or worse still, are using it the wrong way.
Nicola Joseph is a freelance blogger, currently writing for MBC Managed IT Services, leaders in IT support services. She is a keen tennis fan and enjoys watching games with her friends. You can get in touch with Nicola via Twitter @NicolaJoseph.