Developing a compelling investment / business case

Basics Every project is a business initiative focused on a business outcome that produces improved business performance Business owners can control costs when the factors that drive costs are made visible to us. IT services and systems need to be measured in terms of business performance and business outcomes There is nothing called IT Project (CJ’s Opinion)

Technology Investment Governance Structure Enterprise Governance Council Technology Prioritization Committee (Revenue Generators) Technology Prioritization Committee (Revenue Enablers) 20% 80% Lic/Sales Biz Dev Fin HR IT Mktg/PR Legal 3

Organizational Prioritization Model (Quantitative) 4

Prioritization Business Assumptions (Qualitative) The second aspect of the framework involves the use of qualitative reasoning supported by team’s experience and understanding of organizational constraints to derive the right mix of projects within the portfolio.   Things we analyze :   Business Owner understanding and articulation of the business problem to be solved Organizational readiness for change as validated by charter and business case Availability and readiness of solutions that address high-level business requirements Executive/Business Sponsor representation and support of the business case Alignment of the project or initiative to the department’s strategic and operating plan & goals 5

Technology Investment Framework 3) Forced Ranking 1) Organizational Prioritization Model And 2) Prioritization Business Assumptions 6

IT Investment Transparency Run the Business Enable essential services Benefits are measured in reduced cost or risk E.g. : Exchange 2010 upgrade Grow the business Improvements in operations and performance related to existing markets and customer segments Benefits are measured in operational improvements like cycle time, increased revenue E.g.: Opening new channel of sales Transform the business New markets, new products, new horizons for the company or industry Benefits are measured in revenues in the new horizons, typically involve big rewards but also have high risk E.g.: New acquisition model, Angry birds game on the iPhone

IT Investments Metrics (Connect investments to P&L) Financial Metrics IRR Payback NPV P&L Business Impact Gross Margin Revenue Increase Gross Expense Reduction Operating Expense Reduction

Compelling Investment Get the basics (of a business case) right Build stories around compelling subjects: achieving rewards, avoiding major losses, strengthening security, reducing risk Translate the main investment payoffs into favorite senior exec initiatives Choice of language. If promoting competitive advantage, consider words like conquer, crush or triumph. If urgency is the driver, speak of pressure, speed or stress Keep it truthful. Make sure any facts or quotes you use are accurate. If describing future situations, make it clear that they are projections Evangelize the business value and business performance Socialize your investment ideas before you present for “real” approval Know your “approval” audience and their needs Identify “influencers” & “champions” Use Industry Benchmarks (Gartner/Forrester/IDG) wherever applicable

IT Value Traps (Beliefs & Habits that seem to be good but actually lead to trouble) Visibility Trap We shouldn’t have to talk about our performance; it speaks for itself IT is the cost of doing business IT delivers great technology for the enterprise Excuse Nothing is perfect especially something as complex as IT If you don’t follow our policy we can’t guarantee it will work Role “The business” is IT’s customer The customer should know their business processes really well The customer is always right 10

Q&A