1. © 2009 IBM Corporation 1 Power to the test leader: Behind every persuasive argument is a solid business case TBQAA Chapter Meeting May 15, 2012 Debra Sheldon, IBM Corp

2. 2 Behind every persuasive argument is a solid business case, Debra Sheldon, IBM Corp., May 15, 2012 Discussion Points The opportunity space Business case as a tool Using business case logic to re-frame the impact of a defect More complex business case templates & when to use them Related terms and concepts better left to finance/accounting Putting it to good use

3. 3 Behind every persuasive argument is a solid business case, Debra Sheldon, IBM Corp., May 15, 2012 Basic economics drive what ultimately gets addressed during a test cycle Upfront work has been invested in test planning and execution – Defects are uncovered and documented – Tester Prioritization occurs Severity Impact – Development prioritization occurs Test prioritization is utilized Cost to address is factored Examining the defect and the quality summary – Defects details do not typically contain cost of not resolving – Quality summary reports lack business impact of the quality Sponsor is unaware of real impact Cost of poor quality to the end user goes unquantified

4. 4 Behind every persuasive argument is a solid business case, Debra Sheldon, IBM Corp., May 15, 2012 Inability to persuade leads to marginalization “Plug-in runs slow on Apple OS” “This software is a piece of stuff” The story ends Sponsors …… how did this happen Testers………….. that’s what I was trying to tell you These guys sure do complain a lot

5. 5 Behind every persuasive argument is a solid business case, Debra Sheldon, IBM Corp., May 15, 2012 Queue the Business Case  Provides a compelling story to the business as to why the problem needs to be solved  Articulates the problem/opportunity in terms of dollar value  Translates a pain point or emotional situation into a business proposition  Provides actionable information

6. 6 Behind every persuasive argument is a solid business case, Debra Sheldon, IBM Corp., May 15, 2012 Using business case logic in defect prioritization Objective is to quantify the problem and provide actionable information Building the argument Quantify the number of likely occurrences Factor wait time, rework Assign a dollar cost of each occurrence Provide high/low estimates Document any assumptions Store with within the defect Be prepared to defend, not argue the proposition Pick a few

7. 7 Behind every persuasive argument is a solid business case, Debra Sheldon, IBM Corp., May 15, 2012 Using business case approach in the defect prioritization process This impacts all 25,000 estimated users who are residents of California and will result in at least 1 call/on line submittal to customer support per each user. This scenario will cost over $32,000 in support. Works for some defects more than others – Usability User error enablers Repetitive user input – Behavior that results in a support call – Subjective business rules that, over time translate into real dollar loss – Rarely occurring critical defect

8. 8 Behind every persuasive argument is a solid business case, Debra Sheldon, IBM Corp., May 15, 2012 Upgrade to a more formal approach as needed Longer decision timeframe Software purchase Education Process change Considers the life cycle impact Use more finance related concepts Use very basic cost/benefit logic Hard benefits Results in a departmental increase or decrease in budget Tangibles – apparent and accepted by the decision maker Visible on the P&L sheet Soft benefits Cost avoidance Productivity Building requires documenting methodology and using a template

9. 9 Behind every persuasive argument is a solid business case, Debra Sheldon, IBM Corp., May 15, 2012 Building a more detailed business case Document Your methodology

10. 10 Behind every persuasive argument is a solid business case, Debra Sheldon, IBM Corp., May 15, 2012 A basic business case template

11. 11 Behind every persuasive argument is a solid business case, Debra Sheldon, IBM Corp., May 15, 2012 Detailed financial concepts belong to the finance & accounting domains IRR – rate of return on the investment NPV - value of the investment when compared to the alternative Cost of Capital – rate of return that could be earned by putting funds into another investment Feel confident about the acumen by knowing when to punt on more complex business case topics - They pay people to do this stuff Complex business case templates

12. 12 Behind every persuasive argument is a solid business case, Debra Sheldon, IBM Corp., May 15, 2012 Putting it to use For simple scenarios, provide enough quantitative detail to enable translation of the need into a business decision Use business case logic de-emotionalize the situation Creating a more formal business case will add clout to your funding need and outline how this decision will benefit the lead to return on investment Make it your business

13. 13 Behind every persuasive argument is a solid business case, Debra Sheldon, IBM Corp., May 15, 2012 References and Recommended Reading ISixSigma : http://www.isixsigma.com/implementation/financial-analysis/hard- and-soft-savings-what-counts-can-be-counted/http://www.isixsigma.com/implementation/financial-analysis/hard- and-soft-savings-what-counts-can-be-counted/ Financial Management, Theory and Practice. Eugene F Brigham and Michael C Ehrhardt