1. Developing a Business Case
Becky Pezzoni, CRM
ARMA Triangle Chapter
January 10, 2019

2. Agenda Defining the Situation Establish the Project Scope
Gather Facts & Data
Compare Costs and Benefits of Possible Solutions
Walk-through: Sample Analysis
Before we get started… My favorite thing to do is to get ‘facts and data’, so I found this little video to show you what can happen if you skip that step and jump to conclusions:

3. Define the Situation Background Why are you talking about it?
Current Conditions
Where do things stand today?
Goals / Target
What specific outcomes are required?
Analysis
What is the root cause of the problem? Choose a problem analysis tool that shows cause and effect!
Proposal
What is your proposal to reach the target condition or future state
Plan
What activities will be required for implementation and who will be responsible for what, when?
Follow-up
Ensure ongoing PDCA
Background
Why are you talking about it?
Current Conditions
Where do things stand today?
What is the problem (visuals: graphs, charts, maps, etc.)?
Goals / Target
What specific outcomes are required?
Analysis
What is the root cause of the problem? Choose a problem analysis tool that shows cause and effect!
Proposed Countermeasures
What is your proposal to reach the target condition or future state
How will recommended countermeasures affect the root cause to achieve the target
Plan
What activities will be required for implementation and who will be responsible for what, when?
How will you measure progress? (visuals: Gantt charts, timelines, etc)
Followup
What issues can be anticipated?
Ensure ongoing PDCA
Capture and Share Learning

4. Current Conditions WHAT is the problem? WHY is it a problem?
WHERE is it a problem?
HOW is it a problem?
WHEN is it a problem?
WHO is it a problem for?
Describe the current situation as specifically as possible without alluding to causes
DEFINE THE PROBLEM
Your problem statement should address : 5 Ws and an H
What is it (physical description)
Why –why is it a problem?? (symptoms)
Where – where does it occur?? (geographically)
When – when does it occur?? (timing; frequency)
Who – who does it affect (who cares)
How – how does it impact you (effects of problem)

5. Problem Statement The Starting Point to further investigate a problem
Provides a clear, shared understanding of the problem
Without one, we may not be working to solve the correct problem
Does not describe the causes of the problem
Key questions to answer to clearly define the problem statement:
What is the problem? Be specific, based on facts
What do we observe occurring? Physically, through use of data
Where is it appearing? Geography, system, process, supplier, etc.
What is the impact of the problem? For example, on the business - so what?
Can we quantify the problem / impact? Qualitative and quantitative
DEFINING THE PROBLEM
Starting point – clear understanding of the problem
It’s important to ensure you a solving the correct problem - with a scanning project, are we solving a storage and retrieval problem? Is there another problem with being paper based where you might be able to move to a paperless process? Given your situation, be clear about which of those two possible problems you are trying to solve.
Answers key questions
It does not describe the cause

6. Sample Problem Statement
During 2018, an average of 500 new client cases were initiated monthly, using a 10 page paper intake form for each family member. The paper forms consume cubic foot boxes in storage every year, leading to the storage of more than 600 boxes from the past 20 years. Physical storage of such records over their retention period costs the organization $18,000 and due to the volume, retrieval is very cumbersome. This results in loss in public confidence, risk of fines, and potential delays in delivery of vital services to our clients.

7. Establish the Project Scope
Describe the work to be accomplished
What’s the purpose or business need for this project?
Is there a relationship to other projects?
Who are the stakeholders?
Who are the project members, what is each person’s responsibility?
What work is out of scope for this project?
Are we going to scan records to digitize them for easier search and retrieval, or are we going to re-work the process and implement an entirely new system to be paper-free?
Are there other processes in our organization that link to this one, perhaps we can expand the benefits, share costs across more than one opportunity
Once you chose your problem, be clear what you are NOT going to be doing (choose scanning, and not implementing a new paper-free system – save that for later 

8. Gather Facts & Data For current situation, what drives cost?
For proposed solutions, collect cost estimates
Quantify benefits, including cost avoidance
Compare alternative solutions
Compare costs and benefits
For Costs – tangible, intangible – some are direct, bottom line impacting – others may be COST AVOIDANCE
Using office space to store records – if you had to go out and rent new office space for additional staff, you would have to spend $31/sq foot in downtown Raleigh PER MONTH. Free up that storage for existing office space, and avoid 31/sq ft/month in a new lease!
Qualitative and Quantitative comparison of alternatives

9. Cost-Benefit Analysis
Establishes an economic framework to evaluate the viability of a project
Begins with the gathering of facts and data about the situation
Information gathered and analyzed enables and supports decision-making and the choice among various alternatives
Provides the Return On Investment (ROI)
The results of this analysis therefore allows you to compare go and no go decisions, and the implications of each
Sound analysis supported by verifiable facts & data facilitates leadership support and resource allocation
Reality check – a million dollar solution on a 10K budget – not viable
Support decision making
Share ‘what’s your background’ story?
Challenges are ok! Welcomed, in fact.
We want our work to be defensible, transparent, trustworthy!
$31/sq ft

10. Define the Situation Background Why are you talking about it?
Scantastic Corporation is bursting at the seams with growth, and we don’t have enough room for staff to have on-site offices.
Current Conditions
We have valuable office space in use for storing our critical records, and we can’t yet get rid of the paper records because they have on average ten more years of retention.
Goals / Target
Find a way to have room for new staff without acquiring or leasing new office space
Analysis
We leased office space that is within our budget and are not able at this time to expand our physical footprint for at least two more years.
Proposal
Reassess usage of existing space.
Plan
Take inventory of office space in use for anything other than personnel.
Come up with alternatives with tangible and intangible costs and timelines.
Conduct RFPs if and where necessary.
Follow-up
Ensure office space does not revert to storage in the future. (PDCA!)
Background
Why are you talking about it?
Current Conditions
Where do things stand today?
What is the problem (visuals: graphs, charts, maps, etc.)?
Goals / Target
What specific outcomes are required?
Analysis
What is the root cause of the problem? Choose a problem analysis tool that shows cause and effect!
Proposed Countermeasures
What is your proposal to reach the target condition or future state
How will recommended countermeasures affect the root cause to achieve the target
Plan
What activities will be required for implementation and who will be responsible for what, when?
How will you measure progress? (visuals: Gantt charts, timelines, etc)
Followup
What issues can be anticipated?
Ensure ongoing PDCA
Capture and Share Learning

11. Refresher: Problem Statement
Key questions to answer to clearly define the problem statement:
What is the problem? Be specific, based on facts
What do we observe occurring? Physically, through use of data
Where is it appearing? Geography, system, process, supplier, etc.
What is the impact of the problem? For example, on the business - so what?
Can we quantify the problem / impact? Qualitative and quantitative
DEFINING THE PROBLEM
Starting point – clear understanding of the problem
It’s important to ensure you a solving the correct problem - with a scanning project, are we solving a storage and retrieval problem? Is there another problem with being paper based where you might be able to move to a paperless process? Given your situation, be clear about which of those two possible problems you are trying to solve.
Answers key questions
It does not describe the cause

12. Problem Statement DEFINING THE PROBLEM
What is the problem? Scantastic will be hiring seven new staff in the next six months, and we have space for just two people.
What do we observe occurring? We retain our records in their original paper format and have the equivalent of 480 boxes of paper in storage that must be retained for at least 10 more years.
Where is it appearing? Five offices on the third and fourth floor of Building 1 are currently used as file rooms, with 600 linear feet of shelving in total
What is the impact of the problem? If we retain the offices as file rooms, we will need to lease the equivalent of five new offices, at $31 / square foot
Can we quantify the problem / impact? If we can find an alternative solution for retaining these paper records, we can avoid the additional lease expense of $15,500/month for new office space.
DEFINING THE PROBLEM
Starting point – clear understanding of the problem
It’s important to ensure you a solving the correct problem - with a scanning project, are we solving a storage and retrieval problem? Is there another problem with being paper based where you might be able to move to a paperless process? Given your situation, be clear about which of those two possible problems you are trying to solve.
Answers key questions
It does not describe the cause

13. Establish the Project Scope
To be accomplished: Evaluate alternatives for materials currently stored in office space
Purpose: To avoid expansion of real estate / leasing budget
Systemic relationships: Ensure Scantastic is appropriately managing records for their full retention in accordance with corporate policies and procedures
Stakeholders: All employees, but specifically the leadership team and the staff of Finance and Marketing, who are in need of additional office space for new staff
Project Steering Team: Sonia Smith, Sponsor; Leila Ship, Team Lead, Rebecca Records, Records Manager, work teams to be defined
Out of Scope: This project will not address process reengineering and office automation or office space conversion (e.g. we will continue to house employees in individual offices, due to the nature of our work and corporate culture)
Are we going to scan records to digitize them for easier search and retrieval, or are we going to re-work the process and system to be paper-free?
Are there other processes in our organization that link to this one, perhaps we can expand the benefits, share costs across more than one opportunity
Once you chose your problem, be clear what you are NOT going to be doing (choose scanning, and not implementing a new paper-free system – save that for later 

14. Gather Facts & Data Current Situation:
Seven new positions are expected to be filled in the next 6-9 months
We have two open offices to house new staff
500 square feet of prime office space is currently in use for paper file storage
An estimated 1.2M sheets of paper consume these 600 linear feet of shelving
Gather estimates for three alternatives, defined by the project team:
Scanning paper / converting paper records to digital images
Shifting paper records to secure offsite storage for the duration of their 10 year retention
Leasing additional office space
Compare alternatives and the cost and benefits of each
For Costs – tangible, intangible – some are direct, bottom line impacting – others may be COST AVOIDANCE
Using office space to store records – if you had to go out and rent new office space for additional staff, you would have to spend $31/sq foot in downtown Raleigh PER MONTH. Free up that storage for existing office space, and avoid 31/sqft/month in a new lease!

15. Business Case Model Demo

16. Summary Options Lease Offices Scan Records Store Records Cost Estimate
$186,000/year
$92,780 one time
$60,601/10 years
Pros
Minimal wait time
Conversion to digital records
Cons
Not budgeted (Consider this “Cost Avoidance”)
More expensive than storage; need digital storage solution
Records not readily accessible; just moves the problem
Dependencies
Space Availability
Must reengineer processes to eliminate paper; Need long-term content management solution ($$?)
Must create box level index and establish tracking database. Must modify process for record retrieval; establish SLA
Recommendation
Do not recommend
Preferred Solution
Acceptable short- term Solution

17. Questions?
Slides and Business Case Model sample will be posted on ARMA Triangle Website: Model is just a starting point – make it your own! Disclaimer: no guarantee of accuracy or completeness, individual situation and results will vary!