SWE 1 Business Case SWE 523 Presentation Civan Tamer Küçük

SWE 2 Business Case What is to be done? Why? What are the timescales? What are the costs involved? Cost/benefit analysis

SWE 3 Business Case The Business Case provides a base for business level monitoring and control and ultimately for assessing whether project was worth undertaking at all.

SWE 4 Business Case Content of a business case ? People who made decisions : -Very senior -Extremely very busy

SWE 5 Business Case Content of a business case Introduction and background Management summary Description of problem or opportunity Options available and considered Cost/benefit analysis Impacts and risks Conclusions and recommendations

SWE 6 Business Case Management Summary A statement of what is the problem or opportunity that the project is intended to adress A resume of options considered and why those not chosen have not been recommended A statement showing which option has been recommended, why, and what business benefits are expected to flow from it.

SWE 7 Business Case Costs and benefits Immediate or longer-term Immediate or longer-term Tangible or i ntangible Tangible or intangible CostsBenefits

SWE 8 Business Case Investment appraisal methods Payback calculation – simple and straightforward Discounted cash flow: –Takes into account ‘time value of money’ –Produces a net present value for project –Sensitivity analysis can be applied Internal rate of return – produces single headline number for comparisons

SWE 9 Business Case Payback or ROI ( return of investment)

SWE 10 Business Case DCE (Discount Cash Flow) [(Saving per year-cost per year)*year]- Initial Cost = Net profit per year*year-inital cost= *********************************************************** Year = inital cost \ Net profit per year 5 years is an acceptable amount of time

SWE 11 Business Case Payback calculation

SWE 12 Business Case NPV (Net Present Value) Interest rates are important: Ex: USD initial cost with 20 % interest rate USD profit / year (100/120)*50.000=0.8333*50.000= USD (100/120/1.2)*50 000=0.694*50.000= USD (0.833/1.2/1.2)*50 000=0.694*50.000= USD

SWE 13 Business Case IRR (Internal Rate of Return) -Which which interest rate the project will balance the costs and benefits.? -No specified Formula, use trial and error method.

SWE 14 Business Case Subjective benefits? -Customer satisfaction -Level of service - Staff psychology -Company Reputation

SWE 15 Business Case How to present -Aim -Audience - Arrangement -Appearance

SWE 16 Business Case Benefits realisation Figure 3.2 Benefits realisation and management

SWE 17 Business Case Any Question ?

SWE 18 Business Case THANK YOU!