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Business case

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This presentation i had prepared for the workshop that i conducted for JP Morgan Employees. In the beginning it was rolled out to few employees & they rolled to people in management level too.

This presentation i had prepared for the workshop that i conducted for JP Morgan Employees. In the beginning it was rolled out to few employees & they rolled to people in management level too.

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  • 1. Wednesday, Dec 5, 2012 Julen C Mohanty Business Case
  • 2. Learning Objectives • What is Business Case & Why to use it • The component of an typical business case • How to create an business case
  • 3. CONSIDERATION Divide yourself to different groups A, B, C …… by calling # 1,2,3,4
  • 4. INDEX What we will learn today What’s a Business Case Why do a Business Case When a Business Case Required What does it Contain  In detail of : Assignment • Phase 1: Strategic Context • Phase 2: Analysis and Recommendation s • Phase 3: Management and Capacity  What Makes an Effective Business Case Writing the Business Case Brainstormi Process After the Business Case writing is Complete ng  Case Study
  • 5. What is Business Case A document that forms the basis of advice for executive decision-making for an asset investment. It is a documented proposal to meet a clearly established service requirement. It considers alternative solutions and identifies assumptions, benefits, costs and risks.’ A business case captures the reasoning for initiating a project or task & to persuade those with authority that they should endorse and fund a particular project or initiative The business case generally covers:  The business need or requirement;  The options to best address the business need or requirement;  Analysis of the benefits and costs of the options;  Recommendations regarding the preferred option;  Risk identification and mitigation strategy; and  Implementation strategy.
  • 6. Why do a Business CaseEffective tool for achieving the following outcomes  Show how more efficiently the project can reduce costs;  Demonstrate how the project initiatives can help achieve company/ dept. objectives  Articulate the risks which may eventuate if project is not taken or done incompletely  Identify how previous errors could have been prevented or their impact diminished through the project  Highlight the need for the project to be considered when planning anything across the agency;  Demonstrate how the project benefits the company/ dept  Communicate the resources required to implement the projects adequately  Demonstrate a need for an increased operating budget.
  • 7. When do We need a Business Case Generally needed when funding is required in addition to the usual budget for the Project/ Process management function, mostly BAUs Situations where Top Management is required to know the Problem, The available options as solutions & the best solution out of the available solutions, including the justification of the extra investment that’s going to be done. Business Case is to show the management the unseen forecast of the solution. This always starts with an END in mind, that the management is to be convinced about.
  • 8. 10 MinsTell Something about Business Case No. 1, 2, 3, 4 of sequential teams to answer this A1, B2, C3, D4, E1…..
  • 9. What does Business Case contain These three phases are: Phase 1: Strategic Context Phase 2: Analysis and Recommendation Phase 3: Management and Capacity
  • 10. What does Business Case containPhase 1: Strategic Context Step 1: Business Needs and Desired Outcomes - Establishes the case for change and clearly defines the need for the investment.Phase 2: Analysis and Recommendation Step 2: Preliminary Options Analysis - Identification, analysis, and screening of a comprehensive list of options to demonstrate due-diligence in the selection of choices. Step 3: Viable Options - Builds upon the preliminary analysis of options, where each viable option is subjected to an increasing level of rigorous analysis. Step 4: Justification and Recommendation - Full comparison of each viable option against the evaluation criteria identified in the preliminary analysis - Recommendation of a preferred option based on the net advantages of the viable option over all others.Phase 3: Management and Capacity Step 5: Managing the Investment - Strategic considerations for how the investment will be managed.
  • 11. 10 Mins Write a simple business case to procure Video Desk phones for your teamA2, B3, C4, E1…. Papers to be reviewed by the team sitting on their right side
  • 12. What does Business Case contain STEP - 1 BUSINESS NEED & DESIRED OUTCOME • Strategic Environment • Strategic Fit • Detailed Description of the Business Need STEP - 2 • Scope of Project PRILIMINARY OPTIONS ANALYSIS • Evaluation Criteria PHASE – 1 • List Possible OptionsSTRATEGIC CONTEXT • Screening of Options • Rationale for Rejected & Viable options STEP - 3 PHASE – 2 VIABLE OPTIONS • • Benchmark ANALYSIS AND Alignment • Policy & Standard • Cost RECOMMENDATION • Cost – Benefit Analysis Consideration • Implementation & Capacity • Advantages & • Risk Disadvantages PHASE – 3 JUSTIFICATION & RECOMMENDATIONManagement and Capacity • Comparison Summary MANAGING THE INVESYMENTS • Preferred Option • Governance & Oversight • Risk Mgmt Strategy STEP - 4 • Project Management • Change Mgmt Strategy Strategy • Performance • Outcome Management Measurement Strategy Strategy STEP - 5
  • 13. What does Business Case contain Phase 1: Strategic ContextPhase 1: Strategic Context Phase 2: Analysis and Recommendation Phase 3: Management and Capacity The purpose of this phase is to establish the case for change and clearly define the need for the investment. Where are we now? Describes the current business environment. Where do we want to be? Describes the business objectives. Describes the problem or opportunity facing the What is the business need? organization and the associated proposed investment. Describes the drivers for change. What has triggered the need for change? What are we trying to achieve? Describes the business’ desired outcomes. Describes how the proposed investment maps to the What is the strategic fit? departmental framework, to its goals, priorities, outcomes, and policies, as well as to those of the Organization.
  • 14. What does Business Case contain Phase 1: Strategic ContextPhase 1: Strategic Context Phase 2: Analysis and Recommendation Phase 3: Management and CapacityThe focus of this phase is on the following: Step 1: Business Needs and Desired Outcomes The first step in developing a business case is to identify the need (problem or opportunity) facing the sponsoring organization and the desired business outcomes. To do this effectively, due consideration should be given to the broader organizational context, which includes • the current business environment, • strategic business objectives, • drivers for change, • along with an analysis of how the desired business outcomes align with the overall organizational objectives, structure, and policy framework. Ultimately, demonstrate the value of the investment to the organization.
  • 15. 15 Mins You are IT manager of a bank. The operations people want some kind of IT system to help them in maintaining customer’s data. They have a robust system for maintaining customer’s transactions, but everyone can’t get access to that as there could be mishandling of the customer data. So they want a separate system.You want some software to be installed in your bank to take the details of thecustomer, store it & let the employees extract the data as they want. It’s your responsibility to implement the system.What would be your problem statement when you prepare the business case All to participate in the discussion A4, B1, C2, D3, E4…… has to write this down & read for all others.
  • 16. What does Business Case contain Phase 1: Strategic ContextPhase 2: Analysis and Recommendation Phase 2: Analysis and Recommendation Phase 3: Management and Capacity The purpose of this phase is to analyse various options & do in-depth analysis for the viable option to be selected Presents the viable options and associated costs and benefits that will undergo detailed analysis and the How will we get there? evaluation criteria that ultimately will be used to determine an overall recommendation. This question could be answered by a financial What is the best option? appraisal to ascertain funding, affordability, and cost balancing in relation to benefits and risks. This phase is considered the heart of the business case
  • 17. What does Business Case contain Phase 1: Strategic ContextPhase 2: Analysis and Recommendation Phase 2: Analysis and Recommendation Phase 3: Management and Capacity Step 2: Preliminary Options Analysis Comprehensive list of options should be produced and screened to demonstrate due diligence in the selection process. Once the initial screening is complete, details regarding the decision to either accept or reject an option for further analysis should be presented. The objective is to narrow the field of alternatives down to a reasonable number of viable options - for rigorous analysis It is considered a best practice to include a minimum of 3-4 viable options for analysis, with one being the status quo option.
  • 18. What does Business Case contain Phase 1: Strategic ContextPhase 2: Analysis and Recommendation Phase 2: Analysis and Recommendation Phase 3: Management and Capacity Step 3: Viable Options A more rigorous analysis of the viable options is conducted at this point in the business case by building on the previous section’s analysis. The advantages and disadvantages (with supporting evidence) of each option should be fully explored and evaluated in terms of their costs (total or incremental) and risks. identify the preferred option from the short list of viable options that answer the investment need and the case for change. This is mostly the Feasibility Analysis of the options that could best address the problem.
  • 19. What does Business Case contain Phase 1: Strategic ContextPhase 2: Analysis and Recommendation Phase 2: Analysis and Recommendation Phase 3: Management and Capacity Step 4: Justification and Recommendation Nothing in the business case will be questioned or scrutinized more than the justification supporting the recommendation to adopt the preferred option. the goal of Step 4 is to identify a preferred option and demonstrate why the option is deemed preferable over all others. The evaluation criteria and the degree to which the key requirements of the business need are addressed will be measured alongside the findings of the viable options analysis conducted in Step 3
  • 20. 15 Mins You are a manager & have teams sitting in Mumbai, Bangalore, HYD & Tampa. There are 8 people & work on the same process. You feel there are lot of communication gap among the team, because of the different placesthey are sitting. You want to propose to sr. management to take some action & make the team collaborate and communicate properly. Sr. management asks you to prepare a Business Case & propose to them, what exactly you want, how that’s going to be beneficial for the dept./ company & what’s you exactly propose them to do. All to participate in the discussion A3, B4, C1, D2, E3…… has to write this down & read for all others. They can take help from their team members.
  • 21. What does Business Case contain Phase 1: Strategic ContextPhase 3: Management and Capacity Phase 2: Analysis and Recommendation Phase 3: Management and Capacity This strategic-level phase should demonstrate to the business case’s reviewers that the investment will be managed effectively. The reviewers—and all the stakeholders—need assurance that all the appropriate project and outcome management strategies are in place to achieve the desired business outcomes Where and how will the investment fit within the Describes the governance and oversight organization’s broader governance and oversight structure? structure for the investment. How will the project be managed and reviewed throughout Describes the project management strategy for its life cycle? the investment. Describes the outcome management strategy for How will the business outcomes be realized? the investment. Describes the risk management strategy for the How will the business risks be mitigated and managed? investment. Describes the change management strategy for How will change be managed and implemented? the investment. Describes the performance measurement How will performance be measured? strategy for the investment.
  • 22. What does Business Case contain Phase 1: Strategic ContextPhase 3: Management and Capacity Phase 2: Analysis and Recommendation Phase 3: Management and Capacity Step 5: Managing the Investment the important final step in the business case development process, is to describe—at a strategic level—how the investment, project, initiative, or event will be managed further reinforce the key messages of the business case, ensuring its soundness and conformity to commonly acknowledged best practices for business. critical project management fundamentals as methodology and procedures are well thought out and in place before the launch of the project:  Governance and oversight  Project management strategy  Outcome management strategy  Risk management strategy  Change management strategy  Performance measurement strategy
  • 23. How to write Business Case Practical Approach Approach Scope Create the Case The generally followed & formal approach by industry is  Define Business Need  Assess Capability Gaps  Determine Solution Approach  Define Solution Scope  Define Business Case The generally non formal approach by industry is  Define Situation  Analyze Situation SARIE  Propose a Recommendation  Plan Implementation  Evaluate the solution
  • 24. How to write Business Case Practical Approach SARIE KEY FEATURES TOOL USED Define Situation Current Problems & Opportunities SWOT Analysis Analyze Situation Root Cause Analysis (what’s missing to Mind Maps, Fishbone Diagrams, meet needs) process Diagrams & other Tools Propose a Recommendation What’s to be delivered & It’s effect Scope freeze, Work Breakdown, Functional Decomposition, User Stories Plan Implementation Most feasible approach to deliver Decision Tree, Weighted Ranking solution Evaluate the solution Measure of Cost & Benefits Cost – Benefit Analysis, Pay back Period Analysis, ROI Situation Statement: • Problem (or opportunity) of ‘A’ • Has the effect of ‘B’ • With the Impact of ‘C’
  • 25. After Business Case is Complete Obtaining Endorsement Implementation • Provide a timeline with clear milestones; • Clearly state roles and responsibilities; • Be linked to costs so that resources needed can be tracked and utilised efficiently • Have clear deliverables & outcomes associated with each milestone so that key performance indicators can be measured. Business Business Case Outcomes Development RESOURCES Business Capability Operational Capability After Business Technical Case Capability Development
  • 26. After Business Case is Complete Monitoring & Reporting • It can provide evidence of your efficient management of projects • It can be used in future business cases to demonstrate that records management projects are cost effective • It can be used to demonstrate how records management adds value to the agency.
  • 27. 30 MinsPrepare a business case in detail, to request your sr management to sponsor commuting facility for your department. All to participate in the Process 4 people to be nominated as Sr. Management persons 2 people will be nominated as dept. managers & they have to prepare the case The 2 people who are preparing the case will take help from rest all people to prepare the case & present to the Sr. management. While these 2 dept. managers are preparing the in detail business case, the Sr. Management guys are also preparing the same business case to have their standpoint & decisions strong.
  • 28. Thank You