1 strategic approaches and business cases internet librarian international october 2007 ulla de...
TRANSCRIPT
1
Strategic Approaches and Business Cases
Internet Librarian International October 2007
Ulla de Stricker, President, de Stricker Associates (Canada)www.destricker.com
Armand Brevig, Global Category Leader, Scientific & Business Information, AstraZeneca (UK)
2
Business Cases: Why and How
Ulla de Strickerwww.destricker.com
3
4
A major challenge consistently encountered
• Business reality: Those who "sign the checks" need solid, compelling reasons why they should support our initiatives / budget requests
• If a solid, compelling case cannot be made for an investment … why would they?
5
6
What we will cover
• The Why: Decision makers' needs
• The What: Elements it must contain - the "recipe"
7
Introduction: The Why
• Decision makers' top concerns:
• Make it easy for me to say yes• Help me march the proposal up the
line• Protect me from the risk of
championing a weak case
8
The Drivers of Decision Making
• Things are not done "just because" - they are done because they …
– Address a problem or opportunity– Enhance image, profits, …– Help meet agreed goals– Or otherwise support strategy
9
What Motivates Decision Makers?
• Intrinsic:– Meeting existing business goals– Achieving "over and above"– Earning a reputation – Grooming for promotion
• Extrinsic:– Avoiding unnecessary hassle/risk– Being close to retirement
10
Understanding Motivation
Awareness of the individual perceptual context helps choose the "pitch"
• But we must also demonstrate an understanding of other factors– Competitive pressures– Budget cuts – Imminent retirements– etc
11
Questions to Ask Throughout
• How will my idea look in the current business environment?
• How will my idea mesh with decision maker's motivations and organizational strategy?
• Is the timing right?
12
13
Document Scope must Fit the Culture
• Corporate culture dictates detail / depth / length of project justification documents
• 3 - 8 - 25: – 3 pager of bullets– 8 pager with brief narrative inserted (+
appendix)– full 25 pager (+ appendix)
14
The What
• As a TOOL to enable someone else, without the detailed insight we have, to arrive at a business decision …
• … the business case contains a specific sequence of elements
15
Rocky Road… But Straight
16
Chapter 1: Exec Summary
• This section may be all that is read• Tip: Write this piece AFTER the other chapters are
done
• Concise statement of the precise action proposed
• Drivers: What we are fixing or reaching for
• Effort and investment: $, time, people
• Benefits
• Strategic alignment
• Readiness to proceed
17
Chapter 2: Background
• This section orients readers why the case was developed and (we hope) motivates them to read it
• "This is why you need to care"
• What is the problem, need, or opportunity (PNO)
• Evidence and metrics
• Origins of the PNO
• Risks and negative consequences of continuing status quo (with metrics)
• Any previous remedial action or initiative that failed, and why
18
Chapter 3: Options
• This section orients readers as to the possibilities considered
• Note: We are not discussing cost yet
• Outline of the full range of options• Reasons why some have been eliminated as
not viable• Details about the viable ones
– Key features– Key pros/cons– Key benefits– Key constraints
19
Chapter 4: Environmental Analysis
• This section assures readers "we are not alone"
• Internal: Who else experienced a similar PNO• What was done or is being done, with what
outcomes• External: Who else experienced a similar PNO• What they are doing about it, with what
outcomes• Lessons learned
20
Chapter 5: Proposed Approach & Method
• We explain, in detail, the viable option we recommend, and how the initiative will unfold
• We propose to … by …• Scope of activity:
– Pilot or full scale – Timeline, human resources– Any other departments / inputs involved
• Critical success factors:– Cooperation from …– Technology, facilities, skills, etc
• Implementation steps:– Step 1, Step 2, etc– Timeline to completion
• Measuring success:– Methods for gauging how close we got to the goals
21
Chapter 6: Budget and Cost Analysis
• Only now do we get to the cost question - it must be seen in the light of all the foregoing
• Anticipated direct and indirect costs– Salaries/benefits; consulting fees– Purchases/licenses/equipment– Training; materials– IT support; facilities
• Implications for existing or next-year budget– Options for cost diversion or sharing– Discretionary funds?
• Staffing effort– New hire(s) & job description(s)– Seconded/reassigned personnel & length of
involvement
22
23
Chapter 7: Benefits• Here's what readers will get for the investment
• Benefits may be the inverse or mirrors/echoes of the PNO statements
• "Measurable to a degree" benefits– time savings, risk reduction, cost cutting, apply labor to
more profitable activity, etc
• Estimated ROI – Challenging for cost centers such as libraries or intranet
shops, but it is worth the effort to calculate– E.g. # staff X hours saved X avg hourly comp
• "Soft" benefits– Better informed / more timely decisions– Enhanced competitiveness– Better-leveraged investments in technology or
information
24
ROI Anecdotes
• We may all remember such spectaculars …
• Project all set to go to investigate ways to reduce precious metal loss at metallurgical lab - estimated $3 Million
• Knowledge worker found Russian article - could read enough to suspect it was relevant
• Modest cost of translation Yes, it was exactly the process needed
• Project not necessary!
25
Example of ROI Estimation
• Although not provable, numbers can be effective in demonstrating we have done our homework.
• Proposition: Hire 1 information professional to assist 100 knowledge workers and to improve the usability of the intranet
• Based on an audit of the 100 knowledge workers' current practices using the intranet …
26
Example of ROI Estimation, cont'd
• 60-80% (= avg 70%) say they spend 10-15 hrs/mo in avg. 10 searches/mo looking for internal documents (not always finding them)
• 40-60% in addition feel they don't have the right documents to hand when they make decisions - but no time to keep looking - element of uncertainty
• They estimate in 10% of search events, critical information is missed, and unnecessary work is done, avg. 1-5 days per event (we'll use 3 for calculations)
27
Caveat
• Any illustrative number crunching must be backed up be credible assumptions / measures / averages
• There are no guarantees and absolutes
• Calculations cannot account for serendipity, lucky coincidence, exceptions, project and seasonal variations, personal memory, etc etc
• Benefits such as "information professionals train knowledge workers to know when to do their own digging vs. seek help" are likewise difficult to quantify
28
Proposition
• Assistance to knowledge workers and improvement in intranet usability will reduce the amount of …
• Wasted KW time in searching• Wasted KW time doing unnecessary work or
pursuing alternate routes to needed documents
• And will in addition …
• Improve the quality of decision making, speed project completion time, etc
29
Example of ROI Estimation, cont'd
• Ignoring vacation time:
• 12 mos * 12 hrs * 70% of 100 = 10,800 hrs• * avg comp of $75/hr = $756,000 cost of
"hunting time"
• 12 mos * 10 searches * 70% of 100 = 8,400 hunts, of which …
• 10% (840) miss critical info to generate 3 days extra work = 2,520 work days
• that could be devoted to productive work• * avg comp of $600/day = $1.512 million cost
of the extra work
30
Example of ROI Estimation, cont'd
• Investment - 1 information professional - at $90K/yr - three areas of gain:
• (1) Could reduce "hunting time" by 50% by improving intranet = $378K savings
• That is, the IP salary has paid for itself, with $288K saving "left over"
• (2) Value of extra work avoided = $1.5 Million
• (3) Could train KW to be more proficient in using intranet tools = additional productivity gains, lowered uncertainty
31
Chapter 8: Strategic Alignment
• This section assures readers we are concerned about aligning with overall direction
• How the proposed action aligns with the formal strategic goals of the organization
• What stakeholder groups will be most affected• How it may support additional initiatives and
stakeholders• Objection-anticipatory information
– List specific objections that could be raised, and deal with each
• Risk-mitigation information– Acknowledge risks and show how they will be
minimized or dealt with
32
Chapter 9: Readiness to Proceed
• We stress overall organizational receptivity and what needs to happen now
• Factors that enable proceeding immediately – "The stakeholders are asking for this"
• "Go" elements: Approval, access to funds, access to people, etc
• Any timing concerns: If project not initiated by X date, these risks exist
• Negative consequences of such deadline related risks
33
Appendix: Supporting Material
• Keen readers will appreciate this "foundation"
• Examples:
• List of external consultations• Other organizations already doing what we
are proposing• References to or copies of published studies,
articles, statistics
34
35
Checklist - Our Own
• Before releasing the Business Case document, we ask ourselves these questions
• Have relevant colleagues reviewed the document as devil's advocates?
• Is the PNO as "bad/urgent" as we claim? • Would we support the case if we were in the
readers' shoes? If not, why not? • Would there be a much cheaper way to get 80%
of the claimed benefit?• Is the narrative too detailed/jargony? Could some
go in the appendix?• Concrete data, numbers wherever possible?
36
Checklist - Readers
• Before releasing the Business Case document, we imagine readers thinking as follows, and ensure the document contains the answers
• I wasn't aware of any issue• If I do nothing, what's the best/worst scenario? • I see some benefits, but will all that $ REALLY
grow profits / increase market reach / etc? • Will I be laughed out of the meeting if I champion
this case? • Am I a guinea pig? • How will we know we got our money's worth?
37
