The Business Case Solution for IT

Justifying information technology (IT) actions or acquisitions in a complex business environment can be a serious challenge.

IT is notorious for “hidden” long-term costs and business benefits that are hard to quantify. All of the business case questions about IT "ROI," IT payback, and total cost of ownership, are not trivial, as you know if you have ever tried to implement a major software system or infrastructure upgrade.

It is no secret that the challenge in justifying IT actions is not financial arithmetic. The mathematics are simple and have been used since the early 1900s. The real challenges in justifying IT actions are:

Knowing which costs and benefits belong in the case and which do not .
Assigning value to cost and benefit impacts from the IT action.
Making costs and benefits concrete when they are not measured in financial terms (so-called "intangible" benefits and costs).
Connecting the results of IT actions with important business objectives.

"Making the case" can seem especially challenging when the proposal is for:

Complex, wide-ranging software systems (ERP, SCM, or CRM, for instance).
Product data management or design software systems.
Hardware infarastructure upgrades.
New technology (VOIP telephony, for example).

For an overview of the approach and the kind of business case that answers the challenging questions effectively, in practical terms that everyone, including your CFO, engineers, and other professionals can understand and trust, please see our white papers "The IT Business Case: Keys to Accuracy and Credibility" and "Business Case Essentials." For more information on Solution Matrix Ltd. clients, please click here.

These papers also preview the process and results we can bring to your IT decision making and planning with The Business Case Solution for IT.

The Business Case Solution for IT

The Business Case Solution for IT is a structured, collaborative project, led by senior Solution Matrix consultants. The project has two objectives:

To develop an accurate understanding of the financial results and other business consequences of a proposed IT action.
To prepare the sponsors for using this understanding to their best advantage, for decision support, for planning, and for improving the quality of the next business case they build.

The case-building project is normally scheduled for completion in three calendar weeks, or less, depending on the complexity and scope of the IT action under study. This includes includes onsite meetings and collaborative workshops with IT management, proposal sponsors, technical specialists, and other key individuals, as well as a formal report to senior management.

For more information about the Business Case Solution for IT or to request a formal proposal, please contact Solution Matrix Ltd

The Business Case Solution
for IT Includes:

Complete case building project management.
Selection of a case building team from the host company or organization.
Recruitment of a Business Case Advisory Group (stakeholders in the IT action and key representatives from Finance, Human Resources, and other specialized areas).
A comprehensive, long-term total cost of ownership model and analysis for the IT unit in view. The model is analyzed to produce a total cost of ownership (TCO) estimate for a "Business as Usual" scenario, and again for each proposal scenario under consideration. TCO model and analyses are implemented and delivered in MS Excel models, for continuing IT management and control.
A complete benefits rationale for the full range of IT benefits, developed and agreed with the collaboration of senior management and the business case advisory group. This establishes the legitimacy of each IT business case benefit, including those that are hard to measure in financial terms.
Cash flow projections for each IT scenario under consideration and important financial metrics such as return on investment (ROI), payback period, net present value, and internal rate of return. Cash flow projections are implemented and delivered in a dynamic MS Excel model for continuing IT management and control
Established non financial benefits that support business objectives and are important to the case.
Rigorous risk and sensitivity analysis of the business models and cash flow projections, including:

Confidence interval estimates for projected cash flow and financial metrics, including ROI..
Important contingencies that must be managed to target levels by each IT, users, and stakeholders.
Major risk factors and their probabilities.

A comprehensive IT business case report, summarizing and interpreting the above analyses. The business case report is delivered in MS Word and MS Excel files, for ongoing updating and continuing IT management and control.
An IT business case presentation, designed for board-level or senior management review. The presentaiton is delivered as an MS PowerPoint presentation file.

Typical calender time:
            3 weeks
Project leaders:
            Two senior solution Matrix Ltd. consultants with 20+ years
            combined IT and business case experience

For more information about the Business Case Solution for IT or to request a formal proposal, please contact Solution Matrix Ltd.

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