Make them walk your talk

Creating your business case for an IT project is more science than art. Sally Whittle investigates how to achieve the results you...

Which would you rather do: write a business case for your latest project or spend a few hours in the dentist's chair?

Most IT directors hate everything about business cases - from the internal politics to the financial lingo. But these days, the ability to put together a clear and compelling business case is a core competency for all IT executives.

So, how do you know if your business cases are up to scratch? If you have been turned down for more than one major project in the past year, the chances are that your business case was the reason, says Bob Devall, a project practice leader with Computacenter. The good news is that effective business cases are more science than art - developing a good business case is simply a case of getting the right information in the right order, in front of the right audience.

The first lesson to learn is that business cases are read by business people. Use too much technical terminology and your audience will simply assume you are trying to trick them into buying something they do n0t need. Business cases written by IT executives frequently rely on acronyms, performance statistics and product features rather than business outcomes, says Devall. "In any business case you need to distinguish between IS outcomes, such as better performance, and business outcomes, such as greater agility."

The second lesson is that the most important work on a business case happens before you start to type. Before you can start to build your business case, take some time to assess the organisation's strategy and financial position. "There may be some corporate messages that the company is trying to promote, or particular markets it is looking to break into, and linking your project to those messages will put you on the right side of the board," says Teresa Jones, a senior research analyst with Butler Group. "They may be investing in other IT projects that will affect your proposal, or make it more or less attractive."

Consider speaking to the financial director to find out if bidders face a "hurdle rate". This is the rate of return on investment required by the company to fund any new initiative. If your project has a solid business case and shows an ROI above the hurdle rate, then it is in the shareholders' best interests to pursue the project.

Once you have done your homework, it is time to start working on the actual business case. Begin by outlining the current situation and its limitations. This should include a detailed description of the current process, with metrics to show the cost to the business of not making a proposed change. It is important not to skimp on this section - if your analysis of the current situation is not detailed enough, any benefits outlined for the proposed project will be less convincing as a result.

Once you have outlined the current situation, the business case should present a snapshot of the future, describing the broad benefits of the project. All benefits should be phrased in language that the board will understand - this usually means financial or customer-focused terminology. "The board doesn't care that your new server will increase uptime by 20%," says Jones. "They care that the uptime means they can serve an extra 10,000 customers and generate £1m in sales."

If you are not sure exactly how your improved IT will benefit the business, then ask. "If you are proposing new technology to the business, ask the business what difference it will make - it is obvious, but so few people do it," says Dixit Patel, director of technology with consulting group Sapient. "The IT manager might not know exactly what difference a new customer relationship management system will make to how the sales team works, but the marketing director will."

Speaking to business leaders about your business case at this stage has several benefits. It is an opportunity to get an early reality check on your predictions, but it also provides an opportunity to secure buy-in from executives who will eventually decide the fate of your proposal. If your business case says that new finance software will reduce headcount in the finance department, make sure the head of finance agrees to make those cuts or redeploy those workers. If not, the organisation will never realise the value you have promised in your business case and the IT department will get the blame.

It is smart to talk to all the stakeholders at an early stage - they can help pinpoint problems that could derail your business case later, says Patel. Stakeholders might include business executives, board members, user representatives, regulators or anyone else who has a stake in the success or failure of the project.

"The last thing you want is to be presenting your business case to the board and for someone suddenly to raise something you had not considered," Patel says. "It only takes one query from someone you have not met with beforehand and you are looking at another three months' work and your credibility is down the toilet."

Stakeholders will also tell you what metrics you will need to provide to convince them of the project's value. This can help you to produce targeted ROI statistics that will convince the board you have not forgotten any costs involved in the project. The very best business cases will include ROI statistics from independent sources, preferably other organisations that have already deployed the technology.

"That information is not always easy to come by, but that does not mean you should give up and rely on the ROI statistics that the supplier has given you," says Jones. "Consider talking to industry analysts, who will have anonymous reports on the costs of deploying certain technologies, or ask your supplier to put you in contact with reference customers."

Cost benefit is an important element of any business case, but it is not the only thing the board cares about. Soft benefits might be intangible and difficult to measure but they can still provide value to the business. For example, in the early days of the internet, there were no metrics to measure the value of creating a website. Companies simply believed the internet was the future of business.

Whatever the benefits, the most important thing is to remember to phrase them in business terms, says Devall. Although it might be tempting to include detailed descriptions of whizzy new features and functions, the chief executive only really cares about the bottom line and the customer experience, Devall says.

Finally, be sure to include some alternative scenarios in your business plan to take account of changing circumstances. For example, if your business case hinges on sales increasing by 10% thanks to a new website, you need to consider the possibility that the increase will only be 5%, or may not materialise at all. If your projected benefits do not materialise, you will need to explain how you will cope and what additional work will be needed.

After all this, you could still fall at the final hurdle - even the best business plan will fail if you cannot present your case effectively. "Presenting to the board can be really nerve-wracking, and it is easy to get it wrong," says Jones. The worst mistakes? "Reading a script, relying on hundreds of detailed Powerpoint slides, or slipping into jargon - people will drift off, and you have lost it," she says.

To make the most of your opportunity, Jones advises using no more than 10 slides, and try to come up with some real-world examples to illustrate your point. "Try to come up with a visual aid to explain the improvement you want to make, even if it is using the coffee cup," he says. "People think putting things into general terms is somehow dumbing down, but if anything it is the opposite."

If your business case is rejected, ask those involved for some feedback. It may be that the company does not have the resources to fund your project at the moment, but it is possible that your figures were not convincing or you did not take account of another project. "It might be that you need to do some more work, or just that there are lessons to be applied to your next business case," says Jones. "But you should never just give up and go away."

Business case top tips

A good business case should have the following core elements:

  • The introduction summarises in one or two pages the entire document. This is all the chief executive will read, so make it snappy, persuasive and easy to follow.
  • Chapter 1 describes the current situation, complete with its limitations. This should include examples of how the system is not delivering its full potential, explained in business terms.
  • Chapter 2 is a vision of the benefits that will be achieved. Use the metrics in chapter 1 to justify the benefits outlined in chapter 2. Check your predicted benefits with business leaders to see if they are achievable.
  • Chapter 3 talks about the issues around the delivery of these benefits. What does the company need to do to achieve the vision? What should it buy? What processes will change?
  • Chapter 4 should describe the project activity. In other words, who will be responsible for each of the steps in the project, who will need to be trained, who will be redeployed?
  • Chapter 5 details all the solutions from the project and includes a cost benefit analysis. It is a more granular version of chapter 4, and details all the technology that will need to be changed and how, explaining the stages of the project.

Case study: Manchester United launches MUTV

As head of IT at Manchester United Football Club, Mark Hargreaves wrote dozens of business cases. "It was not something I really worried about," he says. "We had a well-defined set of guidelines from the board of directors and there was a five-year IT roadmap. So long as the business case followed those and demonstrated the right return on investment, there were not really any problems."  

However, when Hargreaves moved to Manchester United Interactive, a new division of the club set up to explore new media services, it was a different matter. "So often in new media, you are doing things for the first time, there is no track record and it is harder to look at things purely based on the ROI figures," he says.  

When the club partnered with Didata in 2003 to launch MUTV, an online video highlights service, Hargreaves still created a business case for the board's consideration, however.   "We were already running an online video service that had been developed by Sky and launched in 2001, but there we had problems with the design and the usability of the service," says Hargreaves. "The business case was to justify the investment in a completely new site and upgraded service in partnership with Sky."  

Hargreaves began by working with Mori on a poll of supporters, which revealed a high number of overseas supporters with broadband. "Our research showed that broadband in Korea and Japan was proliferating and even in Europe, adoption over the next five or ten years would increase dramatically," says Hargreaves.   

The technology involved in the site was new to the club, so Hargreaves asked other clubs to share information on the cost of developing similar services.  

"We have good relationships with Celtic and Liverpool and share information on projects," he says. "Although we may not have used something, the chances are that somebody has used it and being a brand like Manchester United often means people are happy to help."  

Most importantly, the business case looked at soft benefits from the project, and this was what tipped the balance and persuaded Manchester United to launch MUTV. "We have a powerful brand and people expect something fresh and up-to-date, so although we could have waited a couple of years, we would have lost that brand value," says Hargreaves.

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