Raising business impact is something that CIOs and IT professionals have sought for years. The goal has led to the development of ‘tools’ ranging from new IT metrics, program/project management, portfolio management and advanced approaches to business case development. It has also led to a range of ‘beliefs’ in the business and IT relationship – including the mantra ‘There are no IT projects only business projects.”
These tools and beliefs have all of the right intentions in theory. In practice they create situations that separate rather than bring the business together by creating formalities around fairly simple things. Consider the formalities around IT governance, portfolio management, prioritization, deployment, etc. and you can see how IT can fall back on following a formal process in exchange for creating functional value.
Nowhere does this happen with greater frequency or ferocity, than it does in the business case.
Business cases are formalisms that fall well short of their functional requirements. Most cases are created as justifications for investment spending rather than pivotal parts of a future performance plan. They justify largely IT projects rather than business goals or performance improvement plans.
Business cases wither away as the project gets started and fall into folklore by the time it comes to deploy for the simple reason that they are incomplete. They stop at macro level benefits, often expressed in abstract terms like ‘improved customer service’, ‘greater agility’, or ‘implementing strategy’.
Without a more explicit set of tools, the value potential of a business case is never quite in hand – to the degree that a company can count on is benefits.
Business value is at your fingertips, if only you would consider each finger in turn
Fortunately, there are a few simple questions that you can ask during business case development to help strengthen your hand and give you the ability to create and manage for greater business impact. Assigning a question to each finger of your hand is a quick way to remember the information required to define business value.
These questions are:
What is the issue? – The answer to this question is the problem that is happening (what’s wrong) or the opportunity you are missing (what needs to happen, that is not happening). Addressing issues represents the start of the business case and the source of value. This question acts like the index finger pointing out the direction of the business case.
When does it happen? – The answer to this question describes the situation or circumstances when the issue comes up. Are there any specific situations, geographies, products or situations when the issue arises more than other situations? This question acts like the middle finger. Expressed alone, saying that a problem happens creates only disturbance and distress. Used in combination with the index finger (what) it makes the ‘peace’ sign that shapes the landscape of the business case.
Who is impacted? – expressed in terms of the specific customers/operating groups/suppliers that feel the issue. Addressing who gives you a target audience, a way to visualize the issue and help determine what success looks like. It also gives you an idea of the size of the population affected. Is this a mass-market problem or one in a particular niche? Without asking who, you never really know the audience and the audience will be allowed to change undermining the business case. This is the ring finger with the sign of success in the wearing of the wealth created by serving others.
How often does it happen? – the frequency of the issue determines the scale of its potential value. How often per day/week/month/quarter does this happen? The more frequently it happens, the greater the value potential and more importantly the potential for the problem to be solved in a meaningful way. The pinky or little finger represents frequency, why I am not really sure.
What is the cost of the issue? – this seems to be the most obvious, like the thumb, and therefore can easily dominate your attention. Expressed in terms of the cost to correct a problem, the revenue, or customer satisfaction etc. missed by an opportunity. Your business case needs a thumb, but it is more than just the thumb, as without the other fingers you cannot grasp the value potential. I know that sounds cheesy but its true.
Business value slips through your fingers when you only think of your thumb
Business cases that focus only on the thumb – the cost – without consideration of the other fingers and their questions. It is easy to think of the thumb, as that is what the CFO is asking about. Thumbs are easy to describe, particularly in terms of financial figures, which are the lagging indicators rather than the situations that are the leading indicators of future performance.
Use the questions above to give yourself a strong hand in creating business performance transformation. Without all of the answers to these questions, you business case is nothing but all thumbs and you will never get the clear, compelling and actionable case required to create value in today’s environment.