Why should IT care about business cases? Aren’t business cases more of interest to finance? In reality, business cases are critical to the success of IT. And here are five reasons why.
Make Projects Succeed
The business case is critical not just for selecting the right project but for keeping projects on the right track, giving the team direction, holding them accountable for achieving measurable objectives, and providing a means to judge whether a requirement contributes to project objectives. Without the yardstick of a business case, the team cannot control scope creep, putting projects at risk of exceeding budget and schedule. Without a business case defining the source of value, the team cannot deliver value, meaning it cannot succeed in any significant way.
Build Team Morale
Teams that share an understanding of how they are contributing value to the organizations have a stronger sense of purpose and greater cohesion. Few problems so demoralize a team as the sense their work serves no purpose. Moreover, success breeds enthusiasm, and business cases are an essential foundation of project success.
Justify the Budget
IT budgets are large and hard to justify. Indeed, in his book Does IT Matter, Nicholas Carr found no correlation between IT spending and profits. If IT does nothing but reactively implement every request that comes from users, or even just those that have amassed political support, the costs of IT grow ever larger without any proof of ROI. Without the hard work of understanding the numbers—how technology will improve a process, how a process improvement affects key metrics, how those metrics will impact the financial statements—IT will never prove its value.
Align IT with the Business
Traditional business analysis—the collecting of requirements—does not align IT with the business. True alignment requires mapping technology to strategy in a way that is objectively and quantifiably demonstrable.
Too many projects begin life with an executive deciding to implement a technology, but without a clearly articulated business purpose. IT gets the assignment and starts collecting requirements, expecting through business analysis to align IT with the business. But various stakeholders have their own conception of what the project should achieve, leading to a chaotic collection of requirements that together fail to achieve any measurable objectives.
Indeed, many stakeholders, assuming that the status quo will remain largely unchanged, advocate requirements that will at best achieve minor time savings and conveniences. While valid and well intentioned, many of these requirements accomplish little other than ballooning project costs and more deeply ingraining inefficient business processes.
The traditional business analysis approach amounts to little more than order taking. It delivers results that are best tactical.
Earn a Seat at the Table
An IT department that merely implements requests without going through business case analysis will remain forever a cost center, subject to the complaints of all those users who have not yet had their requests fulfilled. By learning how to put together business cases, understanding the business and what impacts the bottom line, and how to implement strategy through technology initiatives, IT proves its value to the organization and earns for the CIO a seat at the table of executive leadership.
This is not to say that business case analysis is easy. Indeed, it requires skills not so common in IT. And it requires a change in culture, especially a change in the way IT relates to other parts of the business. Expect more on this in future posts…