For the latter to defeat the former, a more compelling approach to making the case is called for that requires answers to three basic questions: How well does the intended purchase support the organization's larger goals? What net benefits are expected from its successful deployment? And, what risks are involved with its implementation? Those questions address the three components, described below, of a solid business case:

Strategic alignment. The more direct a line can be drawn between a company's mission statement and the contemplated technology deployment, the more likely it is to be embraced by company leadership and the minions who dutifully work in their service. An effective business case for large IT procurements begins with an acknowledgement that such a purchase is being considered strategically, in the context of the entire organization, and as such requires top-down support and a commitment to change for the good of the company.
Financial analysis. The total cost of ownership, including new system license fees, infrastructure expenses and ongoing maintenance and support fees and expenses, needs to be considered along with the cost of staff participation, process modification and employee retraining. All such costs should be meaningfully exceeded by the expected benefits from legacy system retirement, process efficiencies and productivity gains enabled by the new technology. While indirect benefits, including the value of modernization for its own sake, the impact on employee morale and customer perception are important to note, their intangible nature often make them less viable arguments for supporting large technology purchase decisions.
Risk profile. The myriad risks associated with system implementation projects can be segregated into two major categories: delivery risk and benefits realization risk. The former category includes impediments to achieving implementation milestones on time and budget; the latter, failure to create the efficiencies and cost reductions expected as a result of a successful deployment. The probability and impact of occurrence of each risk in each category needs to be quantified and deemed tolerable in order to fully inform the purchase decision.

A business case that considers each of these components provides the perspective needed to properly support a system purchase decision – and satisfy skeptics.

Special Reports /

Virtual Viewpoint: How to Develop a Solid Business Case

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