the business case guide: using val it 2.0
TRANSCRIPT
The Business Case Guide: usinG Val iTTM 2.0
The Business Case Guide: usinG Val iTTM 2.0
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The Business Case Guide: usinG Val iT 2.0
ISACA®
With more than 86,000 constituents in more than 160 countries, ISACA (www.isaca.org) is a leading global provider of knowledge, certifications, community, advocacy and education on information systems (IS) assurance and security, enterprise governance of IT, and IT-related risk and compliance. Founded in 1969, ISACA sponsors international conferences, publishes the ISACA® Journal, and develops international IS auditing and control standards. It also administers the globally respected Certified Information Systems Auditor™ (CISA®), Certified Information Security Manager® (CISM®), Certified in the Governance of Enterprise IT® (CGEIT®) and Certified in Risk and Information Systems Control™ (CRISC™) designations.
ISACA offers the Business Model for Information Security (BMIS) and the IT Assurance Framework (ITAFTM). It also developed and maintains the CoBiT®, Val IT™ and Risk IT frameworks, which help IT professionals and enterprise leaders fulfil their IT governance responsibilities and deliver value to the business.
DisclaimerISACA has designed and created The Business Case Guide: Using Val IT™ 2.0 (the ‘Work’) primarily as an educational resource for those seeking to understand Val IT. ISACA makes no claim that use of any of the Work will assure a successful outcome. The Work should not be considered inclusive of all proper information, procedures and tests or exclusive of other information, procedures and tests that are reasonably directed to obtaining the same results. In determining the propriety of any specific information, procedure or test, enterprise leaders and IT governance, management and assurance professionals should apply their own professional judgement to the specific control circumstances presented by the particular systems or information technology environment.
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aCknowledGeMenTs
ISACA wishes to recognise:
Development Team Steven De Haes, Ph.D., University of Antwerp Management School, Belgium, Co-chairPeter Harrison, CGEIT, FCPA, IBM Australia Ltd., Australia, Co-chairGeorge Ataya, CISA, CISM, CGEIT, CISSP, ICT Control SA-NV, BelgiumKris Budnik, ITIL, Deloitte & Touche, South AfricaJohn Thorp, CMC, I.S.P., The Thorp Network, CanadaRagnar van der Valk, CGEIT, PricewaterhouseCoopers, The NetherlandsPaul A. Williams, CITP, FCA, MBCS, Paul Williams Consulting, UK
Expert ReviewersGeorge Ataya, CISA, CISM, CGEIT, CISSP, ICT Control SA-NV, BelgiumDirk Bruyndonckx, CISA, CISM, CGEIT, MCA, KPMG Advisory, Belgium Sushil Chatterji, CGEIT, Edutech, SingaporePeter de Bruyne, CISA, CGEIT, ITIL, ING, Belgium Dirk Gemke, SPL/AI, The NetherlandsJohn W. Lainhart IV, CISA, CISM, CGEIT, IBM Global Consulting Services, USABjarne Lonberg, CISSP, A.P. Moller–Maersk, DenmarkDebra Mallette, CISA, CGEIT, CSSBB, Kaiser Permanente, USAJohn Mitchell, Ph.D., CISA, CGEIT, CFE, FBCS, LHS Business Control, UKRoger Southgate, CISA, CISM, FCCA, UKJurgen Van De Sompel, CGEIT, Boostit Partners, Belgium Wim Van Grembergen, Ph.D., University of Antwerp Management School, BelgiumWouter Haasloop Werner, Maxeda, The Netherlands
ISACA Board of DirectorsEmil D’Angelo, CISA, CISM, Bank of Tokyo-Mitsubishi UFJ Ltd., USA, International PresidentGeorge Ataya, CISA, CISM, CGEIT, CISSP, ICT Control SA-NV, Belgium, Vice PresidentYonosuke Harada, CISA, CISM, CGEIT, CAIS, InfoCom Research Inc., Japan, Vice PresidentRia Lucas, CISA, CGEIT, Telstra Corp. Ltd., Australia, Vice PresidentJose Angel Pena Ibarra, CGEIT, Alintec, Mexico, Vice PresidentRobert E. Stroud, CGEIT, CA Inc., USA, Vice PresidentKenneth L. Vander Wal, CISA, CPA, Ernst & Young LLP (retired), USA, Vice PresidentRolf von Roessing, CISA, CISM, CGEIT, KPMG Germany, Germany, Vice PresidentLynn Lawton, CISA, FBCS CITP, FCA, FIIA, KPMG LLP, UK, Past International PresidentEverett C. Johnson Jr., CPA, Deloitte & Touche LLP (retired), USA, Past International PresidentGregory T. Grocholski, CISA, The Dow Chemical Co., USA, DirectorTony Hayes, CGEIT, AFCHSE, CHE, FACS, FCPA, FIIA, Queensland Government, Australia, DirectorHoward Nicholson, CISA, CGEIT, City of Salisbury, Australia, DirectorJeff Spivey, CPP, PSP, Security Risk Management, USA, Trustee
aCknowledGemenTs
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aCknowledGeMenTs (cont.)Knowledge BoardGregory T. Grocholski, CISA, The Dow Chemical Co., USA, ChairMichael A. Berardi Jr., CISA, CGEIT, Nestle USA, USAJohn Ho Chi, CISA, CISM, CBCP, CFE, Ernst & Young, SingaporeJose Angel Pena Ibarra, CGEIT, Alintec, MexicoJo Stewart-Rattray, CISA, CISM, CGEIT, CSEPS, RSM Bird Cameron, AustraliaJon W. Singleton, CISA, FCA, Auditor General of Manitoba (retired), CanadaPatrick Stachtchenko, CISA, CGEIT, CA, Stachtchenko & Associates SAS, FranceKenneth L. Vander Wal, CISA, CPA, Ernst & Young LLP (retired), USA
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TaBle of ConTenTs
tAble of ContentS
1. Introduction .................................................................................................................................................................................... 6Purpose of This Guide ..................................................................................................................................................................... 6Intended Audience ........................................................................................................................................................................... 6The Val IT Framework ................................................................................................................................................................... 7Structure of This Guide ................................................................................................................................................................... 7
2. The Business Case as an Operational Tool .............................................................................................................................. 9Development of a Business Case ................................................................................................................................................... 9Fundamental Aspects of a Business Case ................................................................................................................................... 10Conditions for Success .................................................................................................................................................................. 12
3. The Business Case Development Process According to Val IT 2.0 .................................................................................... 14Development of Business Cases (IM1 to IM5) .......................................................................................................................... 15Keeping the Business Case Up to Date (IM8) ............................................................................................................................ 15One Size Does Not Fit All—Tailoring the Approach to Different Investment Scenarios ..................................................... 15
4. Getting Started—How to Use This Guide to Improve a Business Case Process ............................................................. 18
5. Business Case Process Detail ..................................................................................................................................................... 20IM1 Develop and evaluate the initial programme concept business case ................................................................................ 20IM2 Understand the candidate programme and implementation options ................................................................................ 24IM3 Develop the programme plan ............................................................................................................................................... 26IM4 Develop full life-cycle costs and benefits ........................................................................................................................... 27IM5 Develop the detailed candidate programme business case................................................................................................ 30IM8 Update the business case ...................................................................................................................................................... 32
Appendix A—Terminology ............................................................................................................................................................ 33
Appendix B—Business Case .......................................................................................................................................................... 36Template ......................................................................................................................................................................................... 36Example .......................................................................................................................................................................................... 38
Appendix C—Detailed Maturity Model ...................................................................................................................................... 54
References .......................................................................................................................................................................................... 59
ISACA Professional Guidance Publications ............................................................................................................................... 61
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1. IntRoduCtIon
Purpose of This GuideIn almost all enterprises, business cases are used in varying degrees to support decision making regarding new investments in information technology (IT) and IT-enabled change. So why is another guide needed on the ‘why’, ‘what’ and ‘how’ of using business cases in practice?
The seeds of success or failure are sown in the business case. Recent research from the University of Antwerp Management School (UAMS)1 clearly positioned the entire portfolio management process, including business case development, as one of the key practices for achieving better alignment between business and IT and, by extension, business value. However, enterprises generally are not good at developing or using complete and comprehensive business cases. A 2006 Cranfield University School of Management study2 found that while 96 percent of respondents develop business cases for most investments involving IT, 69 percent are not satisfied with the effectiveness of the practice. More specifically:• 69 percent were not satisfied with the business case development process.• 68 percent were not satisfied with the identification and structuring of benefits.• 81 percent were not satisfied with the evaluation and review of results.• 38 percent admitted that benefits claims were exaggerated to get the business cases approved.
The intention of this publication is to position the business case as a valuable management tool—an operational tool—and to provide an easy-to-follow guide, based on the Val IT 2.0 framework, to create, maintain and use the business case. As such, this publication builds on and enhances the earlier version of this guide issued by ISACA in 2006: Enterprise Value: Governance of IT Investments, The Business Case. This new publication is now fully aligned with Val IT 2.0. It provides ‘how to do it’ tips, maturity models, examples and references to other materials for using and implementing the business case processes as powerful operational tools.
It should also be noted that although this publication is focussed on business cases for IT-enabled investments, its content is applicable to all types of investment in business change.
Intended AudienceThis document is applicable and scalable to all enterprises, regardless of industry sector or size, and their status as public or private, for profit or not for profit. Understanding the relevance of business cases is of primary importance to all management levels across both the business and IT parts of the enterprise—from the chief executive officer (CEO) and the C-suite to those directly involved in and responsible for the selection, procurement, development, implementation, deployment and benefits realisation processes.
This publication is intended to provide business and IT executives and organisational leaders, business sponsors and programme managers with an easy-to-follow guide on getting from ‘why’ through ‘what’ to ‘how’ in creating, maintaining and using the business case as an operational tool. The purpose is to enable them to understand what information they need to identify, gather and analyse to assess the viability of their proposed investments. This information covers the process during initial selection, implementation and ongoing operation of assets resulting from the investment to retirement. It discusses all elements of how to keep the business case up to date in support of stage-gate and other reviews.
1 De Haes, Steven; Wim Van Grembergen; ‘An Exploratory Study Into the Design of an IT Governance Minimum Baseline Through Delphi Research’, Communications of the Association of Information Systems, vol. 22, 2008
2 Ward, John; ‘Delivering Value From Information Systems and Technology Investments: Learning From Success’, Forum (monthly newsletter of Cranfield School of Management, UK), August 2006
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1. inTroduCTion
The Val IT FrameworkThe business case does not operate in a vacuum. It is an integral part—a fundamental building block—of the Val IT framework, which is a comprehensive and pragmatic organising framework that enables the creation of business value from IT-enabled investments.
The ISACA CoBiT framework organises IT governance management and control objectives and good practices by IT domains and processes, and links them to business requirements. The ISACA Val IT and Risk IT frameworks align with, and complement, the CoBiT framework. Val IT explains how to extract optimal value from IT-enabled investments. Risk IT fills the gap between generic risk management frameworks and detailed (primarily security-related) IT risk management frameworks.
Val IT integrates a set of practical and proven governance principles, processes, practices and supporting guidelines that help boards, executive management teams and other enterprise leaders optimise the realisation of value from IT-enabled investments. Used with considerable success by leading enterprises for many years, the proven processes and practices within Val IT are presented as a single integrated governance framework that provides business and IT decision makers with a comprehensive, consistent and coherent approach to creating concrete and measurable business value.
This document is consistent in approach and terminology with, and complements, Enterprise Value: Governance of IT Investments: Val ITTM Framework 2.0 and its companion document, Enterprise Value: Getting Started With Value Management. It provides a framework that will enable business cases to be consistently prepared by enterprises using Val IT, and thus facilitates trend analysis and quantitative benchmarking of results across those enterprises.
Val IT contains essential guidance for any executive interested in establishing a more effective approach to value management and describes the fundamental role of the business case within the domain of Investment Management (IM). It contains practical advice on how to translate ‘knowing’ into ‘doing’, i.e., how to close the ‘knowing-doing’ gap3.
Structure of This GuideThis guide for developing business cases for IT-enabled investment programmes is composed of five chapters. Chapter 1 provides introductory information.
Chapter 2 covers what Val IT suggests should be contained in the business case and how it should be managed and used.
Chapter 3 describes, at a high level, the Val IT business case process and how it should be tailored/customised for different situations.
Chapter 4 presents how an organisation can use the Val IT business case maturity model to determine where it wants to be and where and how to get started on improving its business case process.
Chapter 5 provides business case process details for specific key management practices (KMPs) in Val IT that are related to creating, maintaining and closing the business case. For each KMP identified, detailed guidance is provided on how to apply these practices in an enterprise (see figure 1). First, the KMP under review is shown. Next, specific information on ‘what to do’ is retained, as defined in Val IT Responsible, Accountable, Consulted and Informed (RACI) charts, and linked to key accountabilities and responsibilities. ‘What to do’ information is then translated into more detailed ‘tips for how to do it’. This detailed guidance is supplemented (when applicable) with references to typical techniques, tools and templates that are used in practice (and are mostly available in the public domain).
3 Pfeffer, Jeffrey; Robert Sutton; The Knowing-doing Gap, Harvard Business School Press, USA, 2000
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Appendix B includes a business case template and a fully elaborated business case example.
Figure 1—Structure of Val IT Business Case Guidance
Val IT Key Management Practice
What to do
By Whom
Accountability Primary Responsibility
• List of steps derived from RACI charts in Val IT 2.0
Tips for How To Do It
• Detailed steps helping how to apply the ‘what to do’ in practice
Typical Techniques, Tools and Templates to Do It
• Cross-references to typical techniques, tools and templates used to apply the practices
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2. The Business Case as an operaTional Tool
2. the buSIneSS CASe AS An opeRAtIonAl tool In most enterprises today, the business case is generally seen as a necessary evil or a bureaucratic hurdle to get over to obtain required financial and other resources. The focus is on the technology project, and the costs of the technology, with only a cursory discussion of benefits or changes that the business might need to make to create or sustain value from use of the technology. Business cases are also all too often treated as ‘one-off’ documents that are rarely looked at again once the required resources have been obtained—other than, possibly, at a post-implementation review.
This approach to business cases can cause challenges down the road. A well-developed and intelligently used business case for a business change programme is actually one of the most valuable tools available to management—the quality of the business case and the processes involved in its creation and use throughout the economic life cycle of an investment has an enormous impact on creating and sustaining value. It describes a proposed journey from initial ideas to realising expected outcomes for beneficiaries (i.e., those whose money is being invested and for whom the return should be secured) and other affected stakeholders.
The business case is not a one-time, static document. It is an operational tool that must be continually updated to reflect the current reality so as to provide the basis for informed decision making—not just for initial commitment of resources, but for managing the investment through its full economic life cycle. In so doing, the business case must include answers to the following questions4—answers based on relevant, current and accurate business-focussed information:• Are we doing the right things?—What is proposed? For what business outcome? How do the projects within the
programme contribute?• Are we doing them the right way?—How will it be done? What is being done to ensure that it will fit with other current
or future capabilities?• Are we getting them done well?—What is the plan for doing the work? What resources and funds are needed?• Are we getting the benefits?—How will the benefits be delivered? What is the value of the programme?
In summary, a business case must be:• At the business programme level• Complete and comprehensive, including the full scope of change required in achieving the desired outcomes• A ‘living’, operational document that is kept up to date• Used to manage the programme through its full economic life cycle
Development of a Business CaseThe business case should be developed from a strategic perspective—from the top down—starting with a clear understanding of the desired business outcomes, the full scope of effort required to achieve the outcomes, key roles and responsibilities, and details of critical tasks and milestones.
Resources should be identified for each of the three work streams driving the outcome (see figure 2). These work streams include delivering:• Business capabilities—For example, enabling and supporting cross-selling• Operational capabilities—For example, providing access to complete customer information• Technical capabilities—For example, acquiring/developing and implementing a customer relationship management
(CRM) application
4 Based on the ‘Four Ares’ as described by John Thorp in his book, The Information Paradox—Realizing the Business Benefits of Information Technology, written jointly with Fujitsu, first published in 1998 and revised in 2003, McGraw-Hill, Canada
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Resource requirements should be identified for the full economic life cycle of each capability, including: acquire/build, implement, operate and retire.
Each of these work streams needs to be documented with data to support the investment decision and ongoing management of the investment and resulting capabilities, including: • Outcomes (end outcomes and intermediate outcomes)• Initiatives (with their expected contribution to the
outcomes)• Costs• Risks• Assumptions• Metrics (lag metrics that measure achievement of the
outcome and lead metrics that measure progress towards the outcome)
Fundamental Aspects of a Business CaseThe full life cycle of the business case encompasses three fundamental aspects:1. Obtain complete, comprehensive and accurate information at an appropriate level of detail. The business case should provide a complete and shared understanding of the expected business outcomes (intermediate
lead and end lag outcomes) of an investment. It should describe the assumptions taken, how the business outcomes and the validity of the assumptions will be measured, and the full scope of initiatives required in achieving the expected outcomes.
These initiatives should include any required changes to the nature of the enterprise’s business model, business processes, people skills and competencies, enabling technology, and organisational structure required to achieve outcomes. This means not only investments in technology and business capital expenditures (CAPEx), but also operational and technology expenditures (OPEx) for realising and completing the business transformation—for example, cleaning up legacy systems, changing business processes via training on the job, adding new hires and implementing new processes.
Key risks to the successful completion of individual initiatives (i.e., delivery risks) and the achievement of the desired outcomes (i.e., benefit risks) also need to be identified and documented, together with mitigation actions.
The business case should contain all of the information needed for analysing the strategic alignment and financial and non-financial benefits and risks of the investment and for determining its relative value. It should be derived within the context of best- and worst-case scenarios, where appropriate.
At minimum, the business case should include the following: • The reason for the investment—The opportunity or problem that the investment is intended to address • The recommended solution/approach—Include alternatives considered and proposed timetable • The business benefits targeted—The alignment with business strategy, how they will be measured and who in the
business functions will be responsible for securing them
Figure 2—Components and Tasks Central to any Business Case
BusinessOutcomes
BusinessCapability
TechnicalCapability
OperationalCapability
Monitorand
Control
BusinessCase
Development
Reso
urce
s
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2. The Business Case as an operaTional Tool
• The initial investment and ongoing costs—Both the IT and business costs of operating in the changed way • The business changes—Needed to create and realise sustained additional value and the investments needed to make
the changes • The risks inherent in the approach—Including delivery risk (the risk of not being able to deliver required capabilities)
and benefit risk (the risk of the organisation not being able to make and sustain the changes required to use the capabilities to create and sustain value)
• The governance approach for the investment—How the investment and value creation will be monitored throughout the economic life cycle, the metrics to be used and who will be ultimately accountable for the successful creation of optimal value
The business case should, as appropriate, include high-level summaries of and links to: • The detailed programme plan (including individual project plans) • The resourcing plan • The financial plan • The benefits realisation plan (including the benefits register) • The (organisational) change management plan • The risk management plan (including the risk register)
The information in the business case should be validated by appropriate plausibility checks. These should include the appraisal of the logic behind the claimed contribution of initiatives (and intermediate outcomes), the outcomes and associated benefits. The appraisal is best supported by empirical evidence (derived from evaluation of previous investments), especially concerning the logic of contribution and assumptions.
2. Continually update the business case as (internal/external) events occur that (could) influence the business case. Forecasting future effects of IT-enabled investments involves making assumptions about internal and external conditions.
Even with the best of processes, a business case is still no more than a snapshot or best guess at a point in time. The business case process involves much more than providing that initial snapshot to determine whether to proceed with an investment. It involves updating the business case as circumstances change or more information is available so that the business case can be used as an operational tool to manage the investment.
Any investment should be managed by taking into account that there always are risks and those risks should be monitored and controlled throughout the life cycle of the investment by an iterative process of risk identification, risk assessment and risk treatment. Personnel should be encouraged to anticipate, identify and report risks. Risk management and response plans should be maintained and ready for use. Reports on project risk monitoring should be part of progress evaluations and, hence, updates of the business case.
The business case should be continually updated as the projected costs or benefits of the investments change, when risks change, or in preparation for regular reviews.
3. Use the business case as a management tool to support informed decision making throughout the full economic life cycle of the investment (decision).
Once an investment is approved, the business case is the primary tool to monitor and manage the delivery of the required capabilities and the desired outcomes through the full economic life cycle of the investment.
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As an integrated part of the enterprise portfolio, the investment should be actively managed. If the investment is not performing as expected, or business requirements have changed, the approach or desired outcomes may need to be adjusted or the investment may have to be cancelled. Post-mortem analysis of all major investments must be done to learn from success and failure and to continuously improve the portfolio quality.
This ongoing management through the full economic life cycle is where most enterprises cut corners. In most cases, the programme will be considered closed after completing the activities in the programme plan and delivering the required business and IT capabilities (see figure 2). In general, the benefits and the expected value, as set in the business case, will not be realised until some later time, long after the delivery of IT and business capabilities. It is only then that the programme and, subsequently, the business case have proven that they delivered the expected benefits. While the timing of programme and business case closure—which likely will not be the same—may vary in different organisations and for different types of investment, it is important to understand that the full economic life cycle of an investment decision includes the following, as illustrated in figure 3:
• Investment phase—Developing the necessary capabilities • Adoption phase—Implementing the capabilities • Value creation phase—Achieving the expected level of performance and moving the delivered capabilities into the
active service portfolio • Value sustainment phase—Assuring that the assets resulting from the investment continue to create value, which may
well include additional investments required to sustain value • Retirement phase—Decommissioning the resulting assets
Figure 3—Full Economic Life Cycle of an Investment
Conditions for SuccessAll of the previously mentioned elements constitute conditions to achieve success and realise satisfactory benefits from the business case. The risk exists that parts of these conditions are skipped or wrongly assessed in the last minutes of an extensive approval process. Therefore, it is recommended to continuously cross-check each new business case development process against some key success factors. Based on the previous discussion, typical success factors (to be tailored to the organisation) are shown in figure 4.
Service Portfolio
New Business CaseBusiness Case
Programme
Investment Adoption Value Creation Value Sustainment Retirement
Expenditure
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2. The Business Case as an operaTional Tool
Figure 4—Success Factors for Business Case Development Process
• Clarity of the business benefits• Alignment of the business strategy and process to the requirements as stated in the business case• Involvement of business senior management• Availability of appropriate resources and skills• A dynamic partnership championed by the business sponsor• Clear definition of roles and responsibilities• Shared programme development methodology• Shared fixed deadline for the programme delivery• Early and continuous involvement of end users
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3. the buSIneSS CASe development pRoCeSS ACCoRdIng to vAl It 2.0
Val IT consists of three domains: Value Governance (VG), Portfolio Management (PM) and Investment Management (IM), which include 22 processes, as illustrated in figure 5.
Figure 5—Val IT Domains and Processes
Source: Val IT framework 2.0, figure 9
This guide addresses the full life cycle of developing and maintaining business cases, which is fully addressed in the Val IT IM domain. More specifically, the following IM processes are involved in developing and maintaining business cases (see figure 6):• IM1 Develop and evaluate initial programme concept business case.• IM2 Understand the candidate programme and implementation options.• IM3 Develop the programme plan.• IM4 Develop full life-cyle costs and benefits.• IM5 Develop the detailed candidate programme business case.• IM8 Update the business case.
It should be noted that these processes are presented here in a sequential and structured way. In practice, many of these activities can be organised in parallel or in a way suitable and workable to the organisation’s structure and culture.
Establish informed andcommitted leadership.
Align and integrate valuemanagement with enterprise
financial planning.
Define andimplement processes.
Establish effectivegovernance monitoring.
Define portfolio characteristics.
Continuously improvevalue management practices.
Establish strategic directionand target investment mix.
Evaluate and selectprogrammes to fund.
Determine the availability andsources of funds.
Monitor and reporton investment
portfolio performance.
Manage the availabilityof human resources.
Optimise investmentportfolio performance.
Understand the candidateprogramme and
implementation options.
Develop and evaluate theinitial programme concept
business case.
Develop the detailed candidateprogramme business case.
Develop the programme plan.
Launch and managethe programme.
Develop full life-cyclecosts and benefits.
Update operationalIT portfolios.
Update the business case. Monitor and report onthe programme. Retire the programme.
Value Governance (VG)
Portfolio Management (PM)
Investment Management (IM)
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3. The Business Case deVelopmenT proCess aCCordinG To Val iT 2.0
Development of Business Cases (IM1 to IM5)The first five processes in investment management are about the emergence of new investment opportunities in the organisation (IM1) and the development of detailed business cases (IM5) for the approved opportunities, including analyses of alternative courses of actions (IM2), definition of a detailed programme plan (IM3) and full cost-benefit analysis (IM4). Based on this analysis, full business cases are delivered (IM5), including all the aspects delivered in the previous steps (IM1 to IM4).
Keeping the Business Case Up to Date (IM8)Once investment programmes are selected, the business case should be kept up to date throughout the entire life cycle of the investment (IM8).This should be done in preparation for stage-gate reviews or whenever there is any material change that affects the projected costs and/or benefits of the programme, including when assumptions or risks change due to changes to business strategy, or the way the enterprise functions or is organised, or due to the external environment.
As shown in figure 6, the central business case development processes do not operate in a vacuum. The business case development cycle is highly dependent on the input and outcomes of other value management processes such as PM1 Establish strategic direction and target investment mix and provides input to processes such as PM4 Evaluate and select programmes to fund. Also, inputs and outputs to the CoBiT- and Risk IT-related processes should be taken into account. These are not shown in figure 6, but the relationships between Val IT, Risk IT and CoBiT are extensively addressed in the Val IT 2.0 and Risk IT frameworks.
One Size Does Not Fit All—Tailoring the Approach to Different Investment ScenariosThis guide aims to provide a complete and comprehensive approach to the development of a business case for investments in IT or IT-enabled change. While the approach could, and indeed should, be followed for all or most of such investments,
Figure 6—Business Case Development Cycle
IM 1
Business CaseDevelopment Cycle
IM 2
IM 3
IM 4
IM 8
PM 6
IM 9
PM 4
PM 1
IM 6
PM 3IM 7
IM 6
IM 10 VG 1 VG 2
IM 5
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there will be differences in emphasis, rigour of analysis and level of detail in different scenarios. These differences will be largely driven by one of (or a combination of) the following characteristics:1. Culture of the enterprise – Geographic location – Industry – Leadership style2. Nature of the enterprise – Private sector – Public/not-for-profit sector3. Size of the enterprise – Large – Small to medium enterprise (SME)4. Nature of the investment – Degree of freedom
. Discretionary
. Non-discretionary – Type
. Transactional
. Informational
. Transformational
. Infrastructure
Each of these characteristics can help define what approach and level of rigour may be appropriate for business case development. Characteristic 1, culture, is both very specific to geographic location, industry and leadership style, and very broad in terms of impact. There will be different tolerances in terms of the rigour of analysis to support decision making, the level of detail of documentation and the subsequent analysis of performance. While the objective of improving business case processes may be to change the culture, the challenge should not be underestimated. Realistic and achievable objectives should be set, supported by a pragmatic and practical approach.
In figure 7, characteristics 2, 3 and 4 are discussed against a number of dimensions of the business case, including value emphasis (benefits, costs, risks), value considerations (financial, non-financial, strategic alignment, cost), rigour of analysis (high, medium or low) and level of detail of documentation (high, medium or low). The purpose of this discussion is to illustrate the need to tailor the business case development approach according to the specific situation and context. Therefore, the following information is to be regarded as a starting point (and not a strict model) to position the enterprise-specific situation.
The nature of the enterprise (private/public) will influence the emphasis and considerations regarding value within the business case. While private-sector enterprises will typically focus more on financial benefits and outcomes, public and not-for-profit enterprises tend to be oriented more towards non-financial and service delivery outcomes. These non-financial, and often more intangible, aspects within public-sector investments heavily increase their complexity, requiring a stronger rigour of analysis and documentation.
In terms of size, it can be expected that small and medium-sized enterprises (SMEs) will likely need less rigour in documentation because communication and obtaining commitment tends to be less complex in smaller enterprises, and fewer resources are available to develop and maintain highly detailed business cases. The strong linkage to long-term strategic outcomes in large enterprises demands a high rigour of analysis, to ensure that clear and achievable benefits realisations plans are developed in support of achieving those long-term goals.
17© 2 0 1 0 I S A C A . A l l R I g h t S R e S e R v e d .
3. The Business Case deVelopmenT proCess aCCordinG To Val iT 2.0
The nature of the investment impacts the degree of freedom in decision making. For non-discretionary investments, less rigour is needed for documentation since these investments are to be done for compliance reasons. Of course, consideration could be given to identifying additional benefits, if this can be done without introducing excessive costs. For discretionary investments, the calculation of the relative value is important to enable a value-optimising selection; therefore, they need a high rigour of analysis.
Within the group of discretionary investments, different types of investments exist:• Transactional investments—Typically focus on reducing costs and improving efficiency (automation), often require
fewer business change programmes and, therefore, need less rigour for documentation• Informational investments—Typically focus on building applications providing information for managing and
controlling the enterprise (e.g., decision support systems)• Transformational investments—Need a clear definition of the desired business outcomes and all of the business
initiatives required to achieve this outcome, which implies a high need for rigour of analysis and documentation• Infrastructure investments—In most cases, it is very difficult to demonstrate the direct business benefits; therefore,
the business case of this type of investment typically focusses on costs and risks, and needs a high level of analysis and documentation to demonstrate how the investment will contribute to creating or sustaining value in existing or planned services and to evaluate the risk of doing nothing.
Figure 7—Scenarios for Applying the Characteristics
CharacteristicValue
Emphasis Value Considerations
Rigour of Analysis (H, M, L)
Rigour of Documentation
(H, M, L)Nature of the enterprise Private sector
Public and not-for-profit sector
Benefits
Risks
Financial and non-financial outcomes
Many outcomes will be non-financial policy and service delivery outcomes.
M
H - M
M
H - M
Size of the enterprise Large
Small to medium
Benefits
Benefits
Strong linkage to strategic outcomes
Strong linkage to key stakeholder outcomes
H
M
M
L
Nature of the investment Discretionary
Non-discretionary
Benefits
Costs
Relative value is an important issue in terms of selection.
Consideration could/should be given to identifying additional benefits, if this can be done without introducing excessive costs or risks.
H
M
M
L
Investment type Transactional
Informational
Transformational
Infrastructure
Costs
Benefits
Benefits
Costs/Risks
The focus is on reducing costs and improving organisational efficiency in terms of speed and quality of the information produced.
The key question is how the information will be used to create or sustain value.
The important thing is to get clarity of the desired outcomes and of all the business initiatives (changes to: the business model, processes, people competencies, the reward system and organisational structures, etc.) required to achieve the outcomes.
The key questions are:• How will the investment contribute to creating or sustaining value
in existing or planned services?• What is the risk of doing nothing?
M
M
H
H
L
M
H
H
© 2 0 1 0 I S A C A . A l l R I g h t S R e S e R v e d .18
The Business Case Guide: usinG Val iT 2.0
4. gettIng StARted—how to uSe thIS guIde to ImpRove A buSIneSS CASe pRoCeSS
As explained previously, the focus of this guide is targeted at six processes of the Val IT 2.0 framework: IM 1, 2, 3, 4, 5 and 8. These Val IT processes cover 13 key management practices:• IM1 Develop and evaluate the initial programme concept business case. – IM1.1 Recognise investment opportunities. – IM1.2 Develop the initial programme concept business case. – IM1.3 Evaluate the initial programme concept business case.• IM2 Understand the candidate programme and implementation options. – IM2.1 Develop a clear and complete understanding of the candidate programme. – IM2.2 Perform analysis of the alternatives.• IM3 Develop the programme plan. – IM3.1 Develop the programme plan.• IM4 Develop full life-cycle costs and benefits. – IM4.1 Identify full life-cycle costs and benefits. – IM4.2 Develop a benefits realisation plan. – IM4.3 Perform appropriate reviews and obtain sign-offs.• IM5 Develop the detailed candidate programme business case. – IM5.1 Develop the detailed programme business case. – IM5.2 Assign clear accountability and ownership. – IM5.3 Perform appropriate reviews and obtain sign-offs.• IM8 Update the business case. – IM8.1 Update the business case.
Chapter 5 provides detailed guidance on how to apply these practices in an enterprise. As enterprises will be at different starting points and have different priorities for the business case process, the following section provides guidance to help enterprises determine which processes and practices are important to them and which may need improvement.
Improving the business case process is itself a programme of change. As such, it is important to understand the current state of the process and the desired future state. A helpful technique involves using a maturity model. Figure 8 illustrates a high-level maturity model for the business case process. (A more detailed model is included in appendix C.)
Completion of this self-assessment requires responses from key stakeholders within the business and IT functions. They are—or should be—the ones directly involved in owning, developing, evaluating, managing and administering business cases.
This quick assessment provides the enterprise and its stakeholders with initial insight into: • Current levels of understanding, awareness and commitment to the business case process• The gaps amongst these attitudes and practices and the desired future state
Once there is agreement on the current state and the desired future state, the maturity model in figure 8 indicates which Val IT 2.0 processes and practices need to be implemented or improved in an enterprise, and an action plan can be developed to build the necessary capabilities.
19© 2 0 1 0 I S A C A . A l l R I g h t S R e S e R v e d .
4. GeTTinG sTarTed—how To use This Guide To improVe a Business Case proCess
Introducing or improving value management practices within an enterprise, such as business cases, is not an easy task and takes time. It may require significant change in terms of executive thinking and action around decision making, value and accountability. Enterprises must balance achieving the longer-term vision with realising near-term value by taking an incremental approach within the context of the vision and an overall plan.
Figure 8—Business Case Maturity Levels 1 to 5
Treat as a livingdocument
Focus on value
Understandfull scope
Movebeyond IT
Applicability of Val IT Framework 2.0 Key Management Practices
Level 1
IM1.1
Level 2
IM1.2, IM2.1
Level 3
IM3.1
Level 4
IM4.1, IM4.2,IM4.3, IM5.1,IM5.2, IM5.3
Level 5
IM8.1
Level 5—Dynamic Through FullEconomic Life CycleDynamic management to the resulting assetsover the full economic life cycle
Level 4—Accountability and ValueCategorisation of investments with selection ofprogrammes based on value with clear accountabilityand managed for a defined period of time
Level 3—Programme ManagementSelection and limited management based on emerging businesschange and programme view with full IT costs and somebusiness costs over some arbitrary time period, developedby IT and business with clear roles and responsibilities
Level 2—Some Business Engagement and FocusSome selection of IT project/solution/service delivery with more specificoutcomes with some financial metrics, developed by IT with somebusiness engagement with some consideration of ongoing IT costs
Level 1—IT Cost FocusIndividual description of IT project/solution, with broad statementsof delivery outcomes, developed by IT with primary focus oninitial IT spending
© 2 0 1 0 I S A C A . A l l R I g h t S R e S e R v e d .20
The Business Case Guide: usinG Val iT 2.05.
bu
SIn
eSS C
ASe
pR
oC
eSS d
etA
Il
For
eac
h of
the
key
man
agem
ent p
ract
ices
iden
tifi
ed p
revi
ousl
y, th
is s
ecti
on p
rovi
des
deta
iled
gui
danc
e on
how
to a
pply
thes
e pr
acti
ces
in
an e
nter
pris
e. F
irst
, the
key
man
agem
ent p
ract
ice
unde
r re
view
is s
how
n. N
ext,
spec
ific
info
rmat
ion
on ‘
wha
t to
do’
is r
etai
ned,
as
defi
ned
in th
e V
al I
T 2
.0 R
AC
I ch
arts
, and
link
ed to
key
acc
ount
abil
itie
s an
d re
spon
sibi
liti
es. ‘
Wha
t to
do’
info
rmat
ion
is th
en tr
ansl
ated
into
mor
e de
tail
ed ‘
tips
for
how
to d
o it
’. T
his
deta
iled
gui
danc
e is
sup
plem
ente
d (w
hen
appl
icab
le)
wit
h re
fere
nce
to ty
pica
l tec
hniq
ues
that
are
use
d
in p
ract
ice.
IM1
Dev
elop
and
eva
luat
e th
e in
itia
l pro
gram
me
conc
ept
busi
ness
cas
e.IM
1.1
Reco
gnis
e in
vest
men
t opp
ortu
nitie
s.
Reco
gnis
e in
vest
men
t opp
ortu
nitie
s to
cre
ate
valu
e in
sup
port
of th
e bu
sine
ss s
trate
gy a
nd to
add
ress
ope
ratio
nal a
nd c
ompl
ianc
e is
sues
. Cla
ssify
eac
h op
portu
nity
with
resp
ect t
o th
e in
vest
men
t por
tfolio
cat
egor
ies.
Cla
rify
expe
cted
bus
ines
s ou
tcom
e(s)
and
iden
tify,
at a
hig
h le
vel,
busi
ness
, pro
cess
, peo
ple,
te
chno
logy
and
org
anis
atio
nal i
nitia
tives
requ
ired
to a
chie
ve th
e ex
pect
ed o
utco
mes
. The
se re
quire
men
ts m
ust b
e ow
ned
by b
usin
ess
man
ager
s ac
ting
as
busi
ness
spo
nsor
s fo
r the
ove
rall
oppo
rtuni
ty, i
nclu
ding
the
nece
ssar
y IT
pro
ject
s.
Wha
t To
Do
By W
hom
Acco
unta
bilit
yPr
imar
y Re
spon
sibi
lity
• Cr
eate
an
envi
ronm
ent t
hat f
oste
rs a
nd g
ener
ates
new
idea
s an
d ac
know
ledg
es th
eir c
ham
pion
s.
CEO
CEO
• Su
gges
t new
opp
ortu
nitie
s.CE
OBu
sine
ss m
anag
emen
t
Tips
for H
ow T
o Do
It
• De
fine
a bu
sine
ss p
roce
ss to
sol
icit
and
reco
rd n
ew id
eas—
if po
ssib
le, c
onne
cted
to th
e bu
sine
ss b
udge
ting
proc
ess
to e
nsur
e a
regu
lar i
nter
val.
Cons
ider
an
‘inno
vatio
n co
mm
ittee
’ at a
sen
ior m
anag
emen
t lev
el th
at p
roac
tivel
y en
cour
ages
and
eng
ages
bus
ines
s an
d IT
peo
ple
to id
entif
y po
tent
ial o
ppor
tuni
ties.
•
Pre-
defin
e a
tem
plat
e to
ens
ure
that
opp
ortu
nitie
s ar
e re
cord
ed in
a s
tand
ard
way
and
cov
er a
min
imal
num
ber o
f attr
ibut
es s
uch
as a
lignm
ent t
o th
e bu
sine
ss s
trate
gy, h
igh-
leve
l ris
k an
d ex
pect
ed b
enef
its. T
he te
mpl
ate
shou
ld e
ncou
rage
the
deve
lopm
ent o
f ide
as th
at a
re n
ot b
ased
on
the
cost
, but
on
the
busi
ness
met
ric o
n w
hich
the
busi
ness
idea
will
hav
e im
pact
. (Em
phas
is s
houl
d be
on
‘wha
t’ an
d ‘w
hy’ q
uest
ions
inst
ead
of o
n ‘h
ow’ q
uest
ions
.) M
ake
sure
th
at th
e te
rmin
olog
y us
ed in
the
tem
plat
e st
ays
reco
gnis
ble
for s
enio
r man
agem
ent.
• M
ake
sure
that
the
targ
et in
vest
men
t mix
is c
lear
so
that
opp
ortu
nitie
s ar
e id
entif
ied
in th
e ap
prop
riate
dom
ains
. •
Com
mun
icat
e th
e im
porta
nce
of id
ea g
ener
atio
n to
the
empl
oyee
s, in
clud
ing
the
chan
nel t
hat e
mpl
oyee
s sh
ould
use
to c
ontri
bute
thei
r ide
as. C
larif
y th
e st
rate
gic
inte
nt a
nd o
ptim
al in
vest
men
t mix
to e
nabl
e pe
ople
to th
ink
out o
f the
box
whi
le k
eepi
ng fo
cus
on th
e or
gani
satio
n’s
stra
tegy
and
val
ue.
• M
ake
sure
that
the
cham
pion
s of
idea
s re
ceiv
e co
nstru
ctiv
e fe
edba
ck in
a ti
mel
y m
anne
r. •
Crea
te a
n in
nova
tive
envi
ronm
ent b
y, fo
r exa
mpl
e, re
serv
ing
dedi
cate
d w
orki
ng h
ours
or m
eetin
gs o
n ou
t-of
-the
-box
thin
king
and
bra
inst
orm
ing
sess
ions
(u
sing
tech
niqu
es s
uch
as th
e va
lue
chai
n m
odel
; the
com
petit
ive
forc
es m
odel
; stre
ngth
s, w
eakn
esse
s, o
ppor
tuni
ties
and
thre
ats
[SW
OT] a
naly
sis)
. Co
nsid
er g
uida
nce
by e
xter
nal p
artie
s (e
.g.,
cons
ulta
nts,
aud
itors
and
aca
dem
ics)
on
inno
vatio
n cr
eatio
n, to
brin
g th
e ou
tsid
e vi
ew in
to th
e or
gani
satio
n.
21© 2 0 1 0 I S A C A . A l l R I g h t S R e S e R v e d .
5. Business Case proCess deTailIM
1.1
Reco
gnis
e in
vest
men
t opp
ortu
nitie
s. (c
ont.)
Typi
cal T
echn
ique
s, T
ools
and
Tem
plat
es T
o Do
It
• Br
ains
torm
ing
mee
tings
• On
line
sugg
estio
n bo
xes
• Va
lue
chai
n m
odel
and
com
petit
ive
forc
es m
odel
(Por
ter)
• SW
OT a
naly
sis
• IT
tren
ds m
onito
ring
(bas
ed o
n m
arke
t res
earc
h)•
Rew
ard
syst
ems
• M
ind
map
ping
—fre
e m
ind
• St
rate
gy m
aps
(Kap
lan
and
Norto
n)•
Tem
plat
e fo
r cap
turin
g op
portu
nitie
s•
Cost
-ben
efit-
risk
regi
ster
Wha
t To
Do
By W
hom
Acco
unta
bilit
yPr
imar
y Re
spon
sibi
lity
• Ca
tego
rise
and
prio
ritis
e th
e op
portu
nitie
s ac
cord
ing
to th
e in
vest
men
t po
rtfol
io c
ateg
orie
s. C
larif
y ex
pect
ed b
usin
ess
outc
omes
and
iden
tify
the
impa
ct (a
t a h
igh
leve
l) on
bus
ines
s pr
oces
ses,
peo
ple,
tech
nolo
gy a
nd
orga
nisa
tiona
l ini
tiativ
es re
quire
d to
ach
ieve
the
expe
cted
out
com
es.
Busi
ness
man
agem
ent
Valu
e M
anag
emen
t Offi
ce (V
MO)
• De
term
ine
whi
ch o
ppor
tuni
ties
to p
ursu
e fu
rther
or e
xam
ine
in m
ore
dept
h an
d id
entif
y an
d as
sign
a b
usin
ess
spon
sor f
or e
ach
oppo
rtuni
ty to
be
purs
ued.
Busi
ness
man
agem
ent
Busi
ness
man
agem
ent
Tips
for H
ow T
o Do
It
• In
vite
the
cont
ribut
or o
f the
opp
ortu
nitie
s to
exp
lain
the
idea
beh
ind
the
oppo
rtuni
ty in
mor
e de
tail.
• Ba
sed
on th
e in
itial
opp
ortu
nity
and
bac
kgro
und
give
n by
the
cont
ribut
or, f
urth
er re
fine
the
expe
cted
out
com
es, c
osts
and
risk
s to
the
orga
nisa
tion,
te
chno
logy
, bus
ines
s, p
roce
sses
and
peo
ple.
• Ca
tego
rise
the
iden
tifie
d op
portu
nitie
s in
to th
e se
lect
ed a
nd w
eigh
ted
targ
et in
vest
men
t por
tfolio
mix
(Val
IT 2
.0 V
G3 a
nd P
M1)
, e.g
., op
portu
nitie
s ca
tego
rised
as
‘man
dato
ry’,
‘con
tinui
ty’ a
nd ‘d
iscr
etio
nary
’ (st
rate
gic,
tran
sfor
mat
iona
l and
tran
sact
iona
l).•
Per c
ateg
ory,
per
form
a h
igh-
leve
l cos
t-be
nefit
-ris
k es
timat
e, e
.g.,
by p
lotti
ng th
e op
portu
nitie
s in
to a
cos
t-be
nefit
-ris
k qu
adra
nt, l
eadi
ng to
an
iden
tific
atio
n of
the
quic
k w
ins,
nic
e to
hav
es, d
on’t
dos
and
mus
t hav
es.
• Co
nsul
t inv
estm
ent a
nd s
ervi
ces
boar
d (IS
B) a
nd c
hief
info
rmat
ion
offic
er (C
IO) o
n th
e ap
prop
riate
ness
and
risk
s of
the
oppo
rtuni
ties.
• An
alys
e fo
r syn
ergi
es a
cros
s bu
sine
ss u
nits
. In
case
of s
yner
gy, i
dent
ify a
cha
mpi
on w
ho c
an w
ork
acro
ss th
e bu
sine
ss u
nits
. •
Sele
ct o
ppor
tuni
ties
to p
ursu
e fu
rther
. •
Base
d on
cos
t-be
nefit
-ris
k es
timat
es, f
ind
appr
opria
te b
usin
ess
spon
sor a
nd v
erify
ow
ners
hip
for p
ursu
ing
the
oppo
rtuni
ty fu
rther
.•
Prov
ide
feed
back
to th
e ch
ampi
ons
for t
he s
tatu
s of
the
idea
s.
Typi
cal T
echn
ique
s, T
ools
and
Tem
plat
es T
o Do
It
• In
terv
iew
tech
niqu
es•
Wor
ksho
p se
ssio
ns•
Tem
plat
e co
st-b
enef
it-ris
k qu
adra
nt•
Cost
-ben
efit-
risk
regi
ster
IM1
Dev
elop
and
eva
luat
e th
e in
itia
l pro
gram
me
conc
ept
busi
ness
cas
e. (
cont
.)
© 2 0 1 0 I S A C A . A l l R I g h t S R e S e R v e d .22
The Business Case Guide: usinG Val iT 2.0IM
1.2
Deve
lop
the
initi
al p
rogr
amm
e co
ncep
t bus
ines
s ca
se.
Deve
lop
the
initi
al p
rogr
amm
e co
ncep
t bus
ines
s ca
se to
des
crib
e th
e bu
sine
ss o
utco
me(
s) to
whi
ch th
e po
tent
ial p
rogr
amm
e w
ill c
ontri
bute
, the
nat
ure
of
the
prog
ram
me’
s co
ntrib
utio
n an
d ho
w th
at c
ontri
butio
n w
ill b
e m
easu
red.
Hig
h-le
vel b
enef
its, b
oth
finan
cial
and
non
-fin
anci
al, a
nd e
xpen
ditu
res
for t
he fu
ll ec
onom
ic li
fe c
ycle
of t
he p
rogr
amm
e sh
ould
be
estim
ated
. Key
ass
umpt
ions
sho
uld
be s
tate
d an
d ke
y ris
ks s
houl
d be
iden
tifie
d, a
long
with
thei
r pot
entia
l im
pact
and
miti
gatio
n st
rate
gies
.
Wha
t To
Do
By W
hom
Acco
unta
bilit
yPr
imar
y Re
spon
sibi
lity
• De
scrib
e th
e bu
sine
ss o
utco
me(
s) to
whi
ch th
e po
tent
ial p
rogr
amm
e w
ill c
ontri
bute
, the
nat
ure
of th
e pr
ogra
mm
e’s
cont
ribut
ion
and
how
the
cont
ribut
ion
will
be
mea
sure
d.
Busi
ness
spo
nsor
Busi
ness
man
agem
ent
• Es
timat
e th
e hi
gh-le
vel b
enef
its, b
oth
finan
cial
and
non
-fin
anci
al, a
nd th
e co
sts
for t
he fu
ll ec
onom
ic li
fe c
ycle
of t
he p
rogr
amm
e.Bu
sine
ss s
pons
orPr
ogra
mm
e m
anag
er
• St
ate
any
key
assu
mpt
ions
and
iden
tify
key
risks
, alo
ng w
ith th
eir p
oten
tial
impa
ct o
n cu
rren
t and
futu
re b
usin
ess
oper
atio
ns, a
nd m
itiga
tion
stra
tegi
es.
Busi
ness
spo
nsor
Busi
ness
man
agem
ent
• Do
cum
ent t
he in
itial
pro
gram
me
conc
ept b
usin
ess
case
with
info
rmat
ion
obta
ined
.Bu
sine
ss s
pons
orPr
ogra
mm
e m
anag
er
Tips
for H
ow T
o Do
It
• M
ake
reso
urce
s av
aila
ble
and
ensu
re th
at th
ey a
re re
spon
sibl
e fo
r dev
elop
ing
the
initi
al p
rogr
amm
e co
ncep
t bus
ines
s ca
se.
• Dr
aft i
nitia
l pro
gram
me
conc
ept b
usin
ess
case
con
tent
, sta
rting
with
def
inin
g th
e co
ntex
t of t
he s
elec
ted
oppo
rtuni
ty, i
nclu
ding
an
over
view
of b
usin
ess
and
IT p
roje
cts
requ
ired
to e
xecu
te th
e pr
ogra
mm
e.•
Iden
tify
the
pote
ntia
l inv
olve
d pa
rties
(int
erna
l and
ext
erna
l) fo
r exe
cutin
g th
e de
fined
pro
ject
s w
ithin
the
inve
stm
ent p
rogr
amm
e.•
Disc
uss
and
defin
e w
ith th
e in
volv
ed p
artie
s th
e in
itial
est
imat
es o
f the
full
life-
cycl
e co
sts,
ben
efits
and
risk
s to
the
orga
nisa
tion,
tech
nolo
gy, b
usin
ess,
pr
oces
ses
and
peop
le.
• St
ate
key
prer
equi
site
s, a
ssum
ptio
ns a
nd c
ritic
al s
ucce
ss fa
ctor
s.•
Defin
e fo
r eac
h id
entif
ied
bene
fit it
s as
sum
ptio
ns a
nd ri
sks.
Eac
h as
sum
ptio
n an
d ris
k is
tran
slat
ed in
to im
pact
on
stra
tegi
es a
nd, c
onse
quen
tly, i
nto
miti
gatio
n ac
tions
.•
Defin
e a
set o
f key
met
rics
that
cou
ld m
easu
re th
e ex
pect
ed b
usin
ess
outc
omes
afte
r com
plet
ion
of th
e pr
ogra
mm
e (if
nec
essa
ry, c
onsu
lt th
e VM
O fo
r hel
p on
mea
sure
men
t of t
he o
utco
mes
).•
Fina
lise
and
docu
men
t the
initi
al p
rogr
amm
e co
ncep
t bus
ines
s ca
se.
Typi
cal T
echn
ique
s, T
ools
and
Tem
plat
es T
o Do
It
• In
terv
iew
tech
niqu
es•
Wor
ksho
p se
ssio
ns
• Ba
lanc
ed s
core
card
(BSC
) met
hodo
logy
• Ri
sk m
anag
emen
t tec
hniq
ues
• Te
mpl
ate
for c
aptu
ring
oppo
rtuni
ties
• Co
st-b
enef
it-ris
k re
gist
er
IM1
Dev
elop
and
eva
luat
e th
e in
itia
l pro
gram
me
conc
ept
busi
ness
cas
e. (
cont
.)
23© 2 0 1 0 I S A C A . A l l R I g h t S R e S e R v e d .
5. Business Case proCess deTailIM
1.3
Eval
uate
the
initi
al p
rogr
amm
e co
ncep
t bus
ines
s ca
se.
Perfo
rm a
n in
itial
tria
ge o
f the
pro
gram
me
conc
ept b
usin
ess
case
look
ing
at s
trate
gic
alig
nmen
t; be
nefit
s, b
oth
finan
cial
and
non
-fin
anci
al; e
xpen
ditu
res
requ
ired;
reso
urce
s ne
eded
and
con
tent
ion
for t
hem
; ris
ks; a
nd fi
t with
the
over
all i
nves
tmen
t por
tfolio
. Det
erm
ine
whe
ther
the
prog
ram
me
conc
ept h
as
suffi
cien
t pot
entia
l to
just
ify p
roce
edin
g to
full
prog
ram
me
defin
ition
and
eva
luat
ion.
If th
e de
cisi
on is
to p
roce
ed, t
he C
IO s
houl
d si
gn o
ff on
the
tech
nica
l as
pect
s of
the
prog
ram
me
and
the
busi
ness
spo
nsor
sho
uld
appr
ove
and
sign
off
on th
e in
itial
pro
gram
me
conc
ept b
usin
ess
case
.
Wha
t To
Do
By W
hom
Acco
unta
bilit
yPr
imar
y Re
spon
sibi
lity
• Re
view
and
eva
luat
e th
e in
itial
pro
gram
me
conc
ept b
usin
ess
case
.Bu
sine
ss s
pons
orBu
sine
ss m
anag
emen
t
• De
term
ine
whe
ther
the
prog
ram
me
shou
ld p
roce
ed to
full
prog
ram
me
defin
ition
and
eva
luat
ion.
Busi
ness
spo
nsor
Busi
ness
man
agem
ent
Tips
for H
ow T
o Do
It
• Re
view
the
initi
al p
rogr
amm
e co
ncep
t bus
ines
s ca
se w
ith th
e bu
sine
ss s
pons
or a
nd b
usin
ess
man
agem
ent a
nd v
alid
ate
the
busi
ness
out
com
es, c
osts
, ris
ks
and
expe
nditu
res
of th
e in
divi
dual
pro
gram
me.
• If
requ
ired,
mak
e ad
just
men
ts to
the
initi
al p
rogr
amm
e co
ncep
t bus
ines
s ca
se.
• Ob
tain
CIO
app
rova
l and
sig
n-of
f on
the
tech
nica
l asp
ects
of t
he in
itial
pro
gram
me
conc
ept b
usin
ess
case
.•
Obta
in b
usin
ess
spon
sor a
ppro
val a
nd s
ign-
off o
n ov
eral
l ini
tial p
rogr
amm
e co
ncep
t bus
ines
s ca
se.
• Re
visi
t the
pos
ition
of t
he in
itial
pro
gram
me
conc
ept b
usin
ess
case
in th
e se
lect
ed a
nd w
eigh
ted
targ
et in
vest
men
t por
tfolio
mix
.•
Revi
sit t
he c
ost-
bene
fit-r
isk
anal
ysis
, lea
ding
to a
n id
entif
icat
ion
of c
andi
date
pro
gram
mes
per
inve
stm
ent c
ateg
ory.
• Co
nfirm
the
sele
ctio
n of
the
initi
al p
rogr
amm
e co
ncep
t bus
ines
s ca
se.
• Pr
ovid
e fe
edba
ck to
the
cham
pion
s fo
r the
sta
tus
of th
e id
eas.
•
Send
app
rove
d in
itial
pro
gram
me
conc
ept b
usin
ess
case
to V
MO.
• If
an in
itial
pro
gram
me
conc
ept b
usin
ess
case
doe
s no
t hav
e fu
ll po
tent
ial,
docu
men
t bac
kgro
und
and
less
ons
lear
ned
for t
he fu
ture
.
IM1
Dev
elop
and
eva
luat
e th
e in
itia
l pro
gram
me
conc
ept
busi
ness
cas
e. (
cont
.)
© 2 0 1 0 I S A C A . A l l R I g h t S R e S e R v e d .24
The Business Case Guide: usinG Val iT 2.0IM
2.1
Deve
lop
a cl
ear a
nd c
ompl
ete
unde
rsta
ndin
g of
the
cand
idat
e pr
ogra
mm
e.
Utili
se a
ppro
pria
te m
etho
ds a
nd te
chni
ques
, inv
olvi
ng a
ll ke
y st
akeh
olde
rs, t
o de
velo
p an
d do
cum
ent a
com
plet
e an
d sh
ared
und
erst
andi
ng o
f the
exp
ecte
d bu
sine
ss o
utco
mes
(bot
h in
term
edia
te [l
ead]
and
end
[lag
] out
com
es) o
f the
can
dida
te p
rogr
amm
es, h
ow th
ey w
ill b
e m
easu
red,
and
the
full
scop
e of
in
itiat
ives
requ
ired
to a
chie
ve th
e ex
pect
ed o
utco
mes
. The
se in
itiat
ives
sho
uld
incl
ude
all c
hang
es re
quire
d to
the
natu
re o
f the
ent
erpr
ise’
s bu
sine
ss, b
usin
ess
proc
esse
s, p
eopl
e sk
ills
and
com
pete
ncie
s, e
nabl
ing
tech
nolo
gy a
nd o
rgan
isat
iona
l stru
ctur
e. T
he n
atur
e of
eac
h in
itiat
ive’
s co
ntrib
utio
n, h
ow th
at c
ontri
butio
n w
ill b
e m
easu
red
and
all k
ey a
ssum
ptio
ns s
houl
d be
iden
tifie
d. R
elev
ant m
etric
s or
sim
ilar i
ndic
ator
s to
mon
itor t
he v
alid
ity o
f the
se a
ssum
ptio
ns s
houl
d be
id
entif
ied.
Key
risk
s, to
bot
h th
e su
cces
sful
com
plet
ion
of in
divi
dual
initi
ativ
es a
nd th
e ac
hiev
emen
t of t
he d
esire
d ou
tcom
es, s
houl
d al
so b
e id
entif
ied
and,
w
here
pos
sibl
e, m
itiga
ting
actio
ns s
houl
d be
incl
uded
.
Wha
t To
Do
By W
hom
Acco
unta
bilit
yPr
imar
y Re
spon
sibi
lity
• De
velo
p an
d do
cum
ent a
com
plet
e an
d sh
ared
und
erst
andi
ng o
f the
ex
pect
ed b
usin
ess
outc
omes
of t
he c
andi
date
pro
gram
me,
how
they
will
be
mea
sure
d, a
nd th
e fu
ll sc
ope
of in
itiat
ives
requ
ired
to a
chie
ve e
xpec
ted
outc
omes
.
Busi
ness
spo
nsor
Prog
ram
me
man
ager
• Id
entif
y th
e na
ture
of t
he in
itiat
ive’
s co
ntrib
utio
n, h
ow th
at c
ontri
butio
n w
ill b
e m
easu
red,
and
all
key
assu
mpt
ions
and
rele
vant
met
rics
or s
imila
r in
dica
tors
to m
onito
r val
idity
of t
hese
ass
umpt
ions
.
Busi
ness
spo
nsor
Prog
ram
me
man
ager
• Id
entif
y ke
y ris
ks, b
oth
to th
e su
cces
sful
com
plet
ion
of in
divi
dual
initi
ativ
es
and
to a
chie
vem
ent o
f the
des
ired
outc
omes
.Bu
sine
ss s
pons
orPr
ogra
mm
e m
anag
er
Tips
for H
ow T
o Do
It
• Id
entif
y an
d en
gage
a (p
oten
tial)
prog
ram
me
man
ager
for t
he c
andi
date
pro
gram
me.
•
Disc
uss
and
crea
te m
utua
l und
erst
andi
ng b
etw
een
the
busi
ness
spo
nsor
and
pro
gram
me
man
ager
of t
he o
bjec
tives
, ass
umpt
ions
, ris
ks a
nd s
cope
of t
he
cand
idat
e pr
ogra
mm
e.
• De
fine
all o
f the
initi
al b
usin
ess
and
IT in
itiat
ives
requ
ired
for a
chie
ving
the
(can
dida
te) p
rogr
amm
e ob
ject
ives
, exp
ecte
d ou
tcom
es, r
isks
and
sco
pe o
f the
ca
ndid
ate
prog
ram
me.
• Id
entif
y al
l cau
se-a
nd-e
ffect
rela
tions
hips
bet
wee
n th
e in
itiat
ives
by
defin
ing
inte
rmed
iate
out
com
es a
nd e
nd o
utco
mes
by
usin
g, e
.g.,
a Re
sults
Cha
in
(i.e.
, in
achi
evin
g hi
gher
cus
tom
er s
atis
fact
ion,
a c
usto
mer
rela
tions
hip
man
agem
ent [
CRM
] app
licat
ion
coul
d co
ntrib
ute
to k
now
ing
the
cust
omer
bet
ter a
nd
final
ly h
ighe
r cus
tom
er s
atis
fact
ion)
.•
Per i
nitia
tive
and
rela
tions
hip
betw
een
the
initi
ativ
es, t
he fo
llow
ing
aspe
cts
shou
ld, a
t lea
st, b
e co
vere
d:
– Sc
ope
–
Obje
ctiv
es a
nd m
etric
s (in
term
edia
te [l
ead]
indi
cato
rs fo
r the
ben
efits
tow
ards
ulti
mat
e be
nefit
s [la
g] in
dica
tors
)
– Co
st e
stim
ates
–
Key
assu
mpt
ions
–
Key
risks
Typi
cal T
echn
ique
s, T
ools
and
Tem
plat
es T
o Do
It
• Re
sults
Cha
inTM
• Bu
sine
ss-IT
goa
ls c
asca
de (C
obiT
4.1
) •
Tem
plat
e fo
r cap
turin
g op
portu
nitie
s•
Cost
-ben
efit-
risk
regi
ster
IM2
Und
erst
and
the
cand
idat
e pr
ogra
mm
e an
d im
plem
enta
tion
opt
ions
.
Res
ults
Cha
in is
a tr
adem
ark
of F
ujit
su C
onsu
ltin
g.
25© 2 0 1 0 I S A C A . A l l R I g h t S R e S e R v e d .
5. Business Case proCess deTailIM
2.2
Perf
orm
ana
lysi
s of
the
alte
rnat
ives
.
Iden
tify
alte
rnat
ive
cour
ses
of a
ctio
n to
ach
ieve
the
desi
red
busi
ness
out
com
es. A
sses
s th
e re
lativ
e be
nefit
s, c
osts
, ris
ks a
nd ti
min
g fo
r eac
h id
entif
ied
cour
se
of a
ctio
n. S
elec
t the
cou
rse
of a
ctio
n th
at h
as th
e hi
ghes
t pot
entia
l rat
e of
retu
rn a
nd v
alue
, at a
n af
ford
able
cos
t and
with
an
acce
ptab
le le
vel o
f ris
k. D
ocum
ent
the
crite
ria (w
hich
mus
t be
com
mon
for a
ll op
tions
) for
sel
ectin
g an
d th
e ra
tiona
le fo
r rec
omm
endi
ng th
e se
lect
ed c
ours
e of
act
ion.
Bus
ines
s m
anag
emen
t sh
ould
ass
ess
the
curr
ent a
nd fu
ture
bus
ines
s im
pact
of t
he a
ltern
ativ
e co
urse
s of
act
ion,
and
the
IT fu
nctio
n sh
ould
ass
ess
the
tech
nica
l im
pact
.
Wha
t To
Do
By W
hom
Acco
unta
bilit
yPr
imar
y Re
spon
sibi
lity
• Id
entif
y al
tern
ativ
e co
urse
s of
act
ion
to a
chie
ve th
e de
sire
d bu
sine
ss
outc
omes
. Bu
sine
ss s
pons
orPr
ogra
mm
e m
anag
er
• As
sess
the
rela
tive
bene
fits,
cos
ts, r
isks
and
tim
ing
for e
ach
iden
tifie
d co
urse
of a
ctio
n.Bu
sine
ss s
pons
orPr
ogra
mm
e m
anag
er
• Se
lect
the
cour
se o
f act
ion
that
has
the
high
est p
oten
tial v
alue
, at a
n af
ford
able
cos
t and
with
an
acce
ptab
le le
vel o
f ris
k.Bu
sine
ss s
pons
orPr
ogra
mm
e m
anag
er
Tips
for H
ow T
o Do
It
• Us
e de
fined
key
ass
umpt
ions
and
key
risk
s to
add
ress
pot
entia
l alte
rnat
ive
cour
ses
of a
ctio
n fo
r ach
ievi
ng th
e de
fined
obj
ectiv
es a
nd m
etric
s. F
or e
xam
ple:
–
In a
chie
ving
hig
her c
usto
mer
sat
isfa
ctio
n, a
CRM
app
licat
ion
coul
d co
ntrib
ute
to b
ette
r kno
win
g th
e cu
stom
er a
nd, f
inal
ly, h
ighe
r cus
tom
er s
atis
fact
ion.
–
The
initi
al in
itiat
ive
was
to s
elec
t a c
omm
on o
ff-th
e-sh
elf C
RM a
pplic
atio
n an
d ad
just
org
anis
atio
nal p
roce
sses
.
– An
alte
rnat
ive
cour
se o
f act
ion
coul
d be
to d
evel
op a
cus
tom
-mad
e CR
M a
pplic
atio
n al
igne
d w
ith c
urre
nt o
rgan
isat
iona
l pro
cess
es.
–
Both
initi
ativ
es h
ave
the
sam
e in
term
edia
te b
enef
it(s)
, but
invo
lve
diffe
rent
cos
ts, r
isks
and
pot
entia
l val
ue.
• As
sess
the
impa
ct o
f the
alte
rnat
ive
cour
se o
f act
ion
on th
e co
mpl
ete
Resu
lts C
hain
, to
ensu
re th
at a
ll in
itiat
ives
, alte
rnat
ive
or o
rigin
al, w
ill s
till c
ontri
bute
to
the
end
outc
ome.
• Se
lect
the
cour
se o
f act
ion
that
has
the
high
est p
oten
tial v
alue
, at a
n af
ford
able
cos
t and
with
an
acce
ptab
le le
vel o
f ris
k.•
Adju
st th
e Re
sults
Cha
in b
ased
on
the
sele
cted
cou
rse
of a
ctio
n.•
Conf
irm w
ith th
e bu
sine
ss s
pons
or th
e un
ders
tand
ing
of th
e co
mpl
ete
cand
idat
e pr
ogra
mm
e do
cum
ent,
incl
udin
g th
e ch
ange
s re
quire
d by
the
prog
ram
me
and
the
cont
ribut
ion,
mea
sure
men
t, m
etric
s/in
dica
tors
to m
onito
r.
Typi
cal T
echn
ique
s, T
ools
and
Tem
plat
es T
o Do
It
• Re
sults
Cha
in•
Busi
ness
-IT g
oals
cas
cade
(Cob
iT 4
.1)
• Im
pact
ana
lysi
s of
the
alte
rnat
ive
cour
se o
f act
ion
• Te
mpl
ate
for c
aptu
ring
oppo
rtuni
ties
• Co
st-b
enef
it-ris
k re
gist
er
IM2
Und
erst
and
the
cand
idat
e pr
ogra
mm
e an
d im
plem
enta
tion
opt
ions
. (c
ont.
)
© 2 0 1 0 I S A C A . A l l R I g h t S R e S e R v e d .26
The Business Case Guide: usinG Val iT 2.0IM
3.1
Deve
lop
the
prog
ram
me
plan
.
Defin
e an
d do
cum
ent a
ll pr
ojec
ts, i
nclu
ding
thos
e th
at a
re n
eede
d to
brin
g ab
out c
hang
es to
the
busi
ness
; its
imag
e, p
rodu
cts
and
serv
ices
; bus
ines
s pr
oces
ses;
peo
ple
skill
s an
d nu
mbe
rs; r
elat
ions
hips
with
sta
keho
lder
s, c
usto
mer
s, s
uppl
iers
and
oth
ers;
tech
nolo
gy n
eeds
; and
org
anis
atio
nal r
estru
ctur
ing
proj
ects
that
are
requ
ired
to a
chie
ve th
e pr
ogra
mm
e’s
expe
cted
bus
ines
s ou
tcom
es. S
peci
fy re
quire
d re
sour
ces,
incl
udin
g pr
ojec
t man
ager
s an
d pr
ojec
t tea
ms
as w
ell a
s bu
sine
ss re
sour
ces.
Spe
cify
fund
ing,
tim
ing
and
inte
rdep
ende
ncie
s of
mul
tiple
pro
ject
s. S
peci
fy th
e ba
sis
for a
cqui
ring
and
assi
gnin
g co
mpe
tent
st
aff m
embe
rs a
nd/o
r con
tract
ors
to th
e pr
ojec
ts.
Wha
t To
Do
By W
hom
Acco
unta
bilit
yPr
imar
y Re
spon
sibi
lity
• De
fine
and
docu
men
t all
proj
ects
—in
clud
ing
busi
ness
, bus
ines
s pr
oces
s,
peop
le, t
echn
olog
y an
d or
gani
satio
nal p
roje
cts—
requ
ired
to a
chie
ve th
e pr
ogra
mm
e’s
expe
cted
bus
ines
s ou
tcom
es.
Busi
ness
spo
nsor
Prog
ram
me
man
ager
• Sp
ecify
requ
ired
reso
urce
s—in
clud
ing
proj
ect m
anag
ers,
pro
ject
team
s an
d bu
sine
ss re
sour
ces—
whe
re a
pplic
able
. Bu
sine
ss s
pons
orPr
ogra
mm
e m
anag
er
• Sp
ecify
fund
ing,
tim
ing
and
inte
rdep
ende
ncie
s of
mul
tiple
pro
ject
s.Bu
sine
ss s
pons
orPr
ogra
mm
e m
anag
er
Tips
for H
ow T
o Do
It
• Id
entif
y re
quire
d re
sour
ces
for f
urth
er d
evel
opin
g th
e pr
ojec
ts re
quire
d to
exe
cute
all
initi
ativ
es. T
his
coul
d po
tent
ially
be
the
final
pro
gram
me
man
ager
or
inte
rmed
iate
reso
urci
ng, a
nd e
ither
inte
rnal
or e
xter
nal r
esou
rces
.•
Ensu
re m
utua
l und
erst
andi
ng b
etw
een
the
prog
ram
me
man
ager
and
the
(inte
rmed
iate
) pro
ject
man
ager
of t
he o
bjec
tives
, ass
umpt
ions
, ris
ks a
nd s
cope
of
the
prog
ram
me
and
proj
ects
. Dis
cuss
and
def
ine
the
requ
ired
busi
ness
and
IT p
roje
cts
with
the
invo
lved
par
ties
for e
ach
initi
ativ
e.•
For e
ach
of th
ose
iden
tifie
d pr
ojec
ts, e
stim
ate
the
cost
s (re
sour
ces)
, ben
efits
and
risk
s to
the
orga
nisa
tion,
tech
nolo
gy, b
usin
ess,
pro
cess
es a
nd p
eopl
e.•
Stat
e ke
y pr
ereq
uisi
tes,
ass
umpt
ions
and
crit
ical
suc
cess
fact
ors
and
inte
rdep
ende
ncie
s w
ithin
the
prog
ram
me
betw
een
the
proj
ects
.•
Defin
e an
d do
cum
ent a
ll of
the
proj
ect p
lans
requ
ired
for e
xecu
ting
all i
nitia
tives
with
in th
e pr
ogra
mm
e.•
Spec
ify a
ll hu
man
reso
urce
s, w
ith a
spe
cial
focu
s on
key
reso
urce
s, a
nd fi
nanc
ial r
esou
rces
nee
ded
to e
xecu
te a
ll pr
ojec
ts.
• Ba
sed
on h
uman
and
fina
ncia
l res
ourc
es, s
peci
fy th
e ba
sis
for a
cqui
ring
and
assi
gnin
g co
mpe
tent
sta
ff m
embe
rs a
nd/o
r con
tract
ors
to p
roje
cts.
• In
tegr
ate
all p
roje
ct p
lans
into
an
over
all p
rogr
amm
e pl
an, i
nclu
ding
all
inte
rdep
ende
ncie
s.
Typi
cal T
echn
ique
s, T
ools
and
Tem
plat
es T
o Do
It
• Pr
ojec
t ini
tiatio
n do
cum
ent (
PID)
• Ga
ntt c
hart
• Co
st-b
enef
it-ris
k re
gist
er
IM3
Dev
elop
the
pro
gram
me
plan
.
27© 2 0 1 0 I S A C A . A l l R I g h t S R e S e R v e d .
5. Business Case proCess deTailIM
4.1
Iden
tify
full
life-
cycl
e co
sts
and
bene
fits.
Prep
are
a pr
ogra
mm
e bu
dget
that
refle
cts
the
full
econ
omic
life
-cyc
le c
osts
and
the
asso
ciat
ed fi
nanc
ial a
nd n
on-f
inan
cial
ben
efits
.
Wha
t To
Do
By W
hom
Acco
unta
bilit
yPr
imar
y Re
spon
sibi
lity
• Pr
epar
e a
prog
ram
me
budg
et th
at re
flect
s th
e fu
ll ec
onom
ic li
fe-c
ycle
cos
ts
and
finan
cial
and
non
-fin
anci
al b
enef
its.
Busi
ness
spo
nsor
Prog
ram
me
man
ager
Tips
for H
ow T
o Do
It
• Ba
sed
on th
e av
aila
ble
Resu
lts C
hain
(ini
tiativ
es, i
nter
med
iate
resu
lts a
nd u
ltim
ate
bene
fits)
and
the
orga
nisa
tion’
s fin
anci
al p
ract
ices
(e.g
., In
tern
atio
nal
Fina
ncia
l Rep
ortin
g St
anda
rds
[IFRS
], op
portu
nity
cos
ting,
and
ope
ratio
nal c
ostin
g su
ch a
s de
prec
iatio
n ru
les
and
tax
regu
latio
n), f
urth
er d
etai
l the
bus
ines
s ou
tcom
es a
nd h
ow th
e be
nefit
s (q
ualit
ativ
e an
d qu
antit
ativ
e), a
ssum
ptio
ns, m
etric
s an
d ot
her i
ndic
ator
s w
ill b
e m
easu
red
rega
rdin
g re
alis
ing
the
bene
fits.
• De
fine
an o
vera
ll co
st v
iew
of t
he te
chni
cal,
oper
atio
nal a
nd b
usin
ess
capa
bilit
ies
(cur
rent
and
futu
re—
CAPE
X an
d OP
EX).
–
Asse
ts (e
.g.,
hard
war
e, s
oftw
are)
–
Deve
lopm
ent c
osts
–
Wor
kloa
d/im
plem
enta
tion
cost
s (d
esig
n, b
uild
, tes
t, in
tegr
atio
n, tr
aini
ng, g
o-liv
e)
– Bu
sine
ss c
hang
e co
sts
(trai
ning
, bus
ines
s pr
oces
s re
-eng
inee
ring
[BPR
], co
mm
unic
atio
n, s
truct
ure
adju
stm
ents
)
– W
orkl
oad
for b
usin
ess
and
IT o
pera
tions
(e.g
., ru
nnin
g co
sts)
for g
ettin
g th
e be
nefit
s•
Docu
men
t cos
ts a
nd b
enef
its o
ver t
he fu
ll lif
e cy
cle
(incl
udin
g ca
sh fl
ow o
ut a
nd c
ash
flow
in).
Typi
cal T
echn
ique
s, T
ools
and
Tem
plat
es T
o Do
It
• Bu
sine
ss B
SC•
Retu
rn o
n in
vest
men
t (RO
I) (e
.g.,
net p
rese
nt v
alue
)•
Tota
l cos
t of o
wne
rshi
p (T
CO) d
efin
ition
s•
Cost
-ris
k-be
nefit
regi
ster
IM4
Dev
elop
ful
l life
-cyc
le c
osts
and
ben
efit
s.
© 2 0 1 0 I S A C A . A l l R I g h t S R e S e R v e d .28
The Business Case Guide: usinG Val iT 2.0IM
4.2
Deve
lop
a be
nefit
s re
alis
atio
n pl
an.
For e
ach
key
outc
ome,
iden
tify
and
docu
men
t the
cur
rent
bas
elin
e an
d ta
rget
per
form
ance
to b
e ac
hiev
ed; t
he m
etho
d fo
r mea
surin
g ea
ch k
ey o
utco
me;
id
entif
ied
and
acce
pted
acc
ount
abili
ty fo
r ach
ievi
ng th
e ou
tcom
e; th
e ex
pect
ed d
eliv
ery
sche
dule
; and
the
mon
itorin
g pr
oces
s, w
hich
sho
uld
incl
ude
a de
taile
d be
nefit
s re
gist
er, a
long
with
an
expl
anat
ion
of th
e ris
ks th
at m
ay th
reat
en th
e ac
hiev
emen
t of e
ach
key
outc
ome
and
how
thos
e ris
ks w
ill b
e m
itiga
ted.
Wha
t To
Do
By W
hom
Acco
unta
bilit
yPr
imar
y Re
spon
sibi
lity
• De
term
ine
the
met
hod
for m
easu
ring
each
key
out
com
e.
Busi
ness
spo
nsor
Prog
ram
me
man
ager
• Id
entif
y an
d do
cum
ent t
he c
urre
nt b
asel
ine
and
targ
et p
erfo
rman
ce to
be
achi
eved
for e
ach
outc
ome.
Busi
ness
spo
nsor
Prog
ram
me
man
ager
• Id
entif
y ac
coun
tabi
litie
s fo
r ach
ievi
ng o
utco
mes
, the
exp
ecte
d de
liver
y sc
hedu
le, a
nd th
e m
onito
ring
proc
ess,
incl
udin
g a
deta
iled
bene
fits
regi
ster
. Bu
sine
ss s
pons
orPr
ogra
mm
e m
anag
er
• Id
entif
y ris
ks th
at m
ay th
reat
en th
e ac
hiev
emen
t of e
ach
key
outc
ome
and
how
thos
e ris
ks w
ill b
e m
itiga
ted.
Bu
sine
ss s
pons
orPr
ogra
mm
e m
anag
er
Tips
for H
ow T
o Do
It
• Ex
tract
from
the
Resu
lts C
hain
all
of th
e ke
y in
term
edia
te o
utco
mes
lead
ing
to th
e fin
al b
usin
ess
bene
fit, e
.g.,
cust
omer
sat
isfa
ctio
n (c
urre
nt s
core
of 7
.1) a
s an
inte
rmed
iate
out
com
e.•
Tran
slat
e ea
ch o
f the
out
com
es a
nd b
usin
ess
bene
fits
into
spe
cific
, mea
sura
ble,
ach
ieva
ble,
rele
vant
and
tim
e-bo
und
(SM
ART)
key
goa
l ind
icat
ors
(KGI
s),
e.g.
, cus
tom
er s
atis
fact
ion
inde
x (ta
rget
sco
re o
f 7.5
in o
ne y
ear)
as a
KGI
for c
usto
mer
sat
isfa
ctio
n.•
Defin
e th
e m
etric
s pe
r int
erm
edia
te o
utco
me
and
final
bus
ines
s be
nefit
for c
alcu
latin
g th
e KG
I, e.
g., c
usto
mer
sat
isfa
ctio
n as
a s
urve
y w
ith X
que
stio
ns.
• Id
entif
y po
tent
ial r
isks
per
out
com
e an
d ag
ree
on h
ow to
miti
gate
or a
ccep
t eac
h of
thos
e ris
ks.
• De
fine
key
risk
indi
cato
rs a
nd m
etric
s to
ena
ble
cont
inuo
us m
onito
ring
of th
e de
fined
risk
s.•
Dete
rmin
e re
alis
tic ti
me
lines
to a
chie
ve in
term
edia
te o
utco
mes
and
fina
l bus
ines
s be
nefit
s. E
nsur
e th
at th
e fin
al b
usin
ess
bene
fit c
an b
e ac
hiev
ed in
an
acce
ptab
le ti
me
fram
e an
d th
e in
term
edia
te o
utco
mes
are
key
mile
ston
es in
indi
catin
g su
cces
s of
the
road
map
tow
ards
ben
efits
real
isat
ion.
• Ob
tain
ow
ners
hip
of th
e bu
sine
ss s
pons
or a
nd b
usin
ess
man
agem
ent f
or e
ach
of th
e ke
y pe
rform
ance
indi
cato
rs (K
PIs)
and
cor
resp
ondi
ng m
etric
s.
IM4
Dev
elop
ful
l life
-cyc
le c
osts
and
ben
efit
s. (
cont
.)
29© 2 0 1 0 I S A C A . A l l R I g h t S R e S e R v e d .
5. Business Case proCess deTailIM
4.3
Perf
orm
app
ropr
iate
revi
ews
and
obta
in s
ign-
offs
.
Cons
ult a
ll st
akeh
olde
rs a
nd o
btai
n th
eir a
gree
men
t on
the
cost
s an
d be
nefit
s fo
r whi
ch th
ey w
ill a
ccep
t res
pons
ibili
ty. A
ggre
gate
the
findi
ngs
and
chec
k fo
r co
nsis
tenc
y an
d co
here
nce.
Sub
mit
cost
s, b
enef
its a
nd th
e be
nefit
s re
alis
atio
n pl
an fo
r rev
iew
, ref
inem
ent a
nd s
ign-
off b
y th
e bu
sine
ss s
pons
or.
Wha
t To
Do
By W
hom
Acco
unta
bilit
yPr
imar
y Re
spon
sibi
lity
• Su
bmit
a bu
dget
and
ben
efits
real
isat
ion
plan
for r
evie
w, r
efin
emen
t, ap
prov
al a
nd s
ign-
off b
y th
e bu
sine
ss s
pons
or.
Busi
ness
spo
nsor
Prog
ram
me
man
ager
Tips
for H
ow T
o Do
It
• Su
bmit
prog
ram
me
bene
fits
real
isat
ion
plan
to th
e bu
sine
ss s
pons
or a
nd b
usin
ess
man
agem
ent.
• If
need
ed, r
efin
e th
e be
nefit
s re
alis
atio
n pl
an b
ased
on
feed
back
from
the
busi
ness
spo
nsor
and
bus
ines
s m
anag
emen
t.•
Obta
in o
wne
rshi
p of
the
busi
ness
spo
nsor
and
bus
ines
s m
anag
emen
t for
the
prog
ram
me
bene
fits
real
isat
ion
plan
and
, thu
s, fo
r cor
resp
ondi
ng b
usin
ess
cons
eque
nces
(if t
he p
rogr
amm
e ge
ts a
ccep
ted
with
in th
e po
rtfol
io).
Typi
cal T
echn
ique
s, T
ools
and
Tem
plat
es T
o Do
It
• Re
sults
Cha
in
IM4
Dev
elop
ful
l life
-cyc
le c
osts
and
ben
efit
s. (
cont
.)
© 2 0 1 0 I S A C A . A l l R I g h t S R e S e R v e d .30
The Business Case Guide: usinG Val iT 2.0IM
5.1
Deve
lop
the
deta
iled
prog
ram
me
busi
ness
cas
e.
Deve
lop
a co
mpl
ete
and
com
preh
ensi
ve b
usin
ess
case
for t
he p
rogr
amm
e. T
he b
usin
ess
case
sho
uld
incl
ude
an e
xecu
tive
sum
mar
y; a
des
crip
tion
of th
e pr
ogra
mm
e’s
purp
ose,
obj
ectiv
es, a
ppro
ach
and
scop
e; p
rogr
amm
e de
pend
enci
es, r
isks
and
mile
ston
es; o
rgan
isat
iona
l cha
nge
impa
ct o
f the
pro
gram
me;
a
rela
tive
valu
e as
sess
men
t; an
d a
prog
ram
me
plan
. The
pro
gram
me
valu
e as
sess
men
t sho
uld
incl
ude
full
econ
omic
life
-cyc
le c
osts
and
ben
efits
, bot
h fin
anci
al a
nd n
on-f
inan
cial
; the
val
ue to
be
crea
ted
and
the
envi
sage
d ra
te o
f ret
urn;
stra
tegi
c al
ignm
ent;
deliv
ery
and
bene
fits
risks
; pro
gram
me
rela
tive
scor
e as
ass
esse
d by
the
busi
ness
spo
nsor
; and
key
ass
umpt
ions
. The
pro
gram
me
plan
sho
uld
incl
ude
com
pone
nt p
roje
ct p
lans
, a b
enef
its re
alis
atio
n pl
an, t
he
appr
oach
to ri
sk a
nd c
hang
e m
anag
emen
t, an
d th
e pr
ogra
mm
e go
vern
ance
stru
ctur
e an
d co
ntro
ls.
Wha
t To
Do
By W
hom
Acco
unta
bilit
yPr
imar
y Re
spon
sibi
lity
• Co
nfirm
that
all
elem
ents
of t
he b
usin
ess
case
hav
e be
en p
repa
red
in th
e ap
prop
riate
form
at, a
nd a
re c
onsi
sten
t and
com
plet
e, a
nd ta
ke a
ppro
pria
te
actio
ns w
hen
mor
e in
form
atio
n is
requ
ired.
Busi
ness
spo
nsor
Prog
ram
me
man
ager
• Do
cum
ent a
bus
ines
s ca
se fo
r the
pro
gram
me.
Busi
ness
spo
nsor
Prog
ram
me
man
agem
ent o
ffice
• Un
derta
ke th
e fin
al re
ason
abili
ty re
view
focu
ssin
g on
ben
efits
, cos
ts a
nd
risks
, and
ass
ess
the
prog
ram
me
rela
tive
scor
e.Bu
sine
ss s
pons
orPr
ogra
mm
e m
anag
er
Tips
for H
ow T
o Do
It
• Ch
eck
whe
ther
all
inpu
ts a
re re
ceiv
ed a
ccor
ding
to th
e bu
sine
ss c
ase
tem
plat
e re
quire
men
ts (c
ompl
eten
ess
chec
k).
• Ve
rify
cons
iste
nt q
ualit
y of
all
elem
ents
of t
he b
usin
ess
case
, e.g
., w
heth
er c
ost e
stim
ates
acr
oss
the
diffe
rent
bus
ines
s ca
se c
ompo
nent
s ar
e co
mpa
rabl
e an
d m
ade
in a
con
sist
ent m
atte
r. •
Perfo
rm s
ensi
tivity
ana
lysi
s on
the
busi
ness
cas
e (e
.g.,
chec
k as
sum
ptio
ns).
• Ve
rify
whe
ther
the
info
rmat
ion
pres
ente
d in
the
busi
ness
cas
e is
spe
cific
and
rele
vant
for t
he p
rese
nted
pro
gram
me.
•
Cons
ider
, whe
re a
ppro
pria
te, b
ench
mar
ks, p
eer r
evie
ws,
and
sec
ond
opin
ions
to re
assu
ranc
e on
the
qual
ity o
f the
bus
ines
s ca
se.
• Ve
rify
the
busi
ness
cas
e qu
ality
with
the
busi
ness
spo
nsor
.
Typi
cal T
echn
ique
s, T
ools
and
Tem
plat
es T
o Do
It
• Be
nchm
arki
ng a
nd p
eer r
evie
ws
• Bu
sine
ss c
ase
tem
plat
e
IM5
Dev
elop
the
det
aile
d ca
ndid
ate
prog
ram
me
busi
ness
cas
e.
31© 2 0 1 0 I S A C A . A l l R I g h t S R e S e R v e d .
5. Business Case proCess deTailIM
5.2
Assi
gn c
lear
acc
ount
abili
ty a
nd o
wne
rshi
p.
Acco
unta
bilit
y fo
r ach
ievi
ng th
e be
nefit
s, c
ontro
lling
the
cost
s, m
anag
ing
the
risks
, and
co-
ordi
natin
g th
e ac
tiviti
es a
nd in
terd
epen
denc
ies
of m
ultip
le p
roje
cts
shou
ld b
e cl
early
and
una
mbi
guou
sly
assi
gned
and
mon
itore
d. W
here
acc
ount
abili
ty is
ass
igne
d, s
uch
acco
unta
bilit
y m
ust b
e ac
cept
ed; t
here
mus
t be
a cl
ear
man
date
and
sco
pe; a
nd th
e pe
rson
acc
ount
able
mus
t hav
e su
ffici
ent a
utho
rity
and
latit
ude
to a
ct, r
equi
site
com
pete
nce,
com
men
sura
te re
sour
ces,
cle
ar li
nes
of a
ccou
ntab
ility
, an
unde
rsta
ndin
g of
righ
ts a
nd o
blig
atio
ns, a
nd re
leva
nt p
erfo
rman
ce m
easu
res.
Wha
t To
Do
By W
hom
Acco
unta
bilit
yPr
imar
y Re
spon
sibi
lity
• Co
nfirm
app
ropr
iate
ness
of t
he a
ccou
ntab
ilitie
s as
sign
ed.
Busi
ness
spo
nsor
Busi
ness
man
agem
ent
Tips
for H
ow T
o Do
It
• En
sure
that
the
prog
ram
me
owne
rs fo
r ben
efits
, cos
ts, r
isks
and
inte
rdep
ende
ncie
s ar
e at
the
appr
opria
te le
vel i
n th
e or
gani
satio
n, i.
e., a
t lea
st b
udge
t ow
ners
hip
leve
l. •
For a
ll of
the
cost
s an
d be
nefit
s de
fined
in th
e pr
ogra
mm
e, a
ssig
n sp
ecifi
c fu
nctio
ns a
nd n
ames
. •
To re
alis
e co
st o
wne
rshi
p, if
app
ropr
iate
, con
side
r a c
harg
e-ba
ck p
roce
ss, s
o th
at o
wne
rshi
p fo
r cos
ts is
cle
arly
man
aged
. •
To s
uppo
rt be
nefit
s re
alis
atio
n ow
ners
hip
activ
ities
, cla
rify
thei
r im
pact
on
busi
ness
targ
ets
and
clar
ify m
etric
s th
at w
ould
occ
ur w
hen
the
prog
ram
me
is
real
ised
(so
that
the
busi
ness
spo
nsor
can
be
held
acc
ount
able
for a
chie
ving
thes
e ta
rget
s in
a tr
ansp
aren
t way
).•
To b
e ab
le to
man
age
for u
ncer
tain
ty, m
ake
sure
that
ow
ners
hip
for r
isks
is c
lear
ly a
ssig
ned
and
acce
pted
. Ack
now
ledg
e th
at th
e hi
gher
the
risks
, the
hig
her
the
leve
l of s
kills
and
man
agem
ent e
xper
ienc
e th
at a
re re
quire
d.
Typi
cal T
echn
ique
s, T
ools
and
Tem
plat
es T
o Do
It
• Ch
arge
bac
k an
d in
voic
ing
IM5
Dev
elop
the
det
aile
d ca
ndid
ate
prog
ram
me
busi
ness
cas
e. (
cont
.)
© 2 0 1 0 I S A C A . A l l R I g h t S R e S e R v e d .32
The Business Case Guide: usinG Val iT 2.0IM
5.3
Perf
orm
app
ropr
iate
revi
ews
and
obta
in s
ign-
offs
.
Whe
n th
e bu
sine
ss c
ase
has
been
com
plet
ed a
nd a
ccou
ntab
ility
and
ow
ners
hip
have
bee
n ac
cept
ed, t
he C
IO s
houl
d ap
prov
e th
e te
chni
cal a
spec
ts o
f the
pr
ogra
mm
e. T
he b
usin
ess
spon
sor s
houl
d ap
prov
e th
e bu
sine
ss c
ase
and
subm
it it
to th
e IS
B.
Wha
t To
Do
By W
hom
Acco
unta
bilit
yPr
imar
y Re
spon
sibi
lity
• Se
cure
tech
nica
l and
bus
ines
s si
gn-o
ffs.
Busi
ness
spo
nsor
Prog
ram
me
man
ager
Tips
for H
ow T
o Do
It
• Ob
tain
, if a
ppro
pria
te, a
third
-par
ty re
view
.•
Obta
in s
ign-
off o
f all
invo
lved
par
ties
from
bus
ines
s an
d IT
are
as.
• Cr
eate
a fi
nal v
ersi
on o
f the
det
aile
d bu
sine
ss c
ase,
whi
ch w
ill b
e se
nt to
the
ISB.
IM8.
1 Up
date
the
busi
ness
cas
e.
Upda
te th
e bu
sine
ss c
ase
thro
ugho
ut th
e fu
ll ec
onom
ic li
fe c
ycle
of t
he p
rogr
amm
e to
refle
ct th
e cu
rren
t sta
tus
of th
e pr
ogra
mm
e. T
his
shou
ld b
e do
ne in
pr
epar
atio
n fo
r sta
ge-g
ate
revi
ews
or w
hene
ver t
here
is a
ny m
ater
ial c
hang
e th
at a
ffect
s th
e pr
ojec
ted
cost
s an
d/or
ben
efits
of t
he p
rogr
amm
e, in
clud
ing
whe
n as
sum
ptio
ns o
r ris
ks c
hang
e du
e to
cha
nges
to b
usin
ess
stra
tegy
or t
he w
ay th
e en
terp
rise
func
tions
or i
s or
gani
sed,
or d
ue to
the
exte
rnal
env
ironm
ent.
Wha
t To
Do
By W
hom
Acco
unta
bilit
yPr
imar
y Re
spon
sibi
lity
• Up
date
the
busi
ness
cas
e to
refle
ct th
e cu
rren
t st
atus
of t
he p
rogr
amm
e.Bu
sine
ss s
pons
orPr
ogra
mm
e m
anag
er
Tips
for H
ow T
o Do
It
• En
sure
that
the
activ
e pr
ogra
mm
e bu
sine
ss c
ase
will
be
upda
ted
for e
ach
pre-
defin
ed s
tage
-gat
e in
the
portf
olio
man
agem
ent p
roce
ss.
• In
depe
nden
t of t
he re
gula
r sta
ge-g
ates
:
– In
corp
orat
e de
viat
ions
from
the
initi
al p
rogr
amm
e pl
anni
ng, c
osts
, ris
ks a
nd b
enef
its re
alis
atio
n in
to a
n up
date
d bu
sine
ss c
ase.
–
Mon
itor a
nd, i
f app
licab
le, a
djus
t the
bus
ines
s ca
se b
ased
on
chan
ged
inte
rnal
(e.g
., st
rate
gic
chan
ges)
and
ext
erna
l (e.
g.. c
ompe
titio
n) e
nviro
nmen
ts.
• M
aint
ain
owne
rshi
p of
the
prog
ram
me
busi
ness
cas
e af
ter e
ach
adju
stm
ent.
• Ve
rify
proa
ctiv
ely
the
impa
ct o
f the
upd
ates
on
the
over
all p
ortfo
lio (i
f nee
ded,
esc
alat
e to
the
ISB)
.•
Capt
ure
less
ons
lear
ned
for f
urth
er p
rofe
ssio
nalis
ing
the
inve
stm
ent a
nd p
ortfo
lio m
anag
emen
t.
IM8
Upd
ate
the
busi
ness
cas
e.
33© 2 0 1 0 I S A C A . A l l R I g h t S R e S e R v e d .
appendix a—TerminoloGy
AppendIx A—teRmInology
Amortisation—The process of cost allocation that assigns the original cost of an intangible asset to the periods benefited; calculated in the same way as depreciation
Architecture—Description of the fundamental underlying design of the components of the business system or of one element of the business system (e.g., technology), the relationships amongst them and the manner in which they support the organisation’s objectives
Balanced scorecard (BSC)—Developed by Robert S. Kaplan and David P. Norton; a coherent set of performance measures organised into four categories, including traditional financial measures, but adding customer, internal business process, and learning and growth perspectives
Benchmarking—A systematic approach to comparing an organisation’s performance against peers and competitors in an effort to learn the best ways of conducting business (e.g., benchmarking of quality, logistical efficiency and various other metrics)
Benefit—In business, an outcome whose nature and value (expressed in various ways) are considered advantageous by an organisation
Business case—Documentation of the rationale for making a business investment, used to support a business decision on whether or not to proceed with the investment and as an operational tool to support management of the investment through its full economic life cycle
Business process—An interrelated set of cross-functional activities or events that results in the delivery of a specific product or service to a customer
Business sponsor—The individual accountable for delivering the benefits and value of an IT-enabled business investment programme to the organisation
Capital expense (CAPEX)—An expenditure that is recorded as an asset because it is expected to benefit more than the current period. The asset is then depreciated or amortised over the expected useful life of the asset.
Change management—A holistic and proactive approach to managing the transition from a current to a desired organisational state, focussing specifically on the critical human or ‘soft’ elements of change. It includes activities such as culture change (values, beliefs and attitudes), development of reward systems (measures and appropriate incentives), organisational design, stakeholder management, human resource policies and procedures, executive coaching, change leadership training, team building and communications planning and execution.
Charge back—The redistribution of expenditures (costs) to the units within an enterprise that gave rise to them. Without such a policy, misleading views may be given as to the real profitability of a product or service since certain key costs will be ignored or calculated according to an arbitrary formula.
Control Objectives for Information and related Technology (CoBiT)—An internationally accepted process framework for IT. A set of tools that executives at all enterprises can use to ensure that their IT is helping them achieve their goals and objectives. CoBiT was developed and is maintained by ISACA.
© 2 0 1 0 I S A C A . A l l R I g h t S R e S e R v e d .34
The Business Case Guide: usinG Val iT 2.0
Economic Value Added (EVA)—Technique developed by G. Bennett Stewart III (and registered by the consulting firm of Stern, Stewart) where the performance of the corporate capital base, including depreciated investments (such as training, research and development) as well as more traditional capital investments (such as physical property and equipment) are measured against what shareholders could earn elsewhere
Full economic life cycle—The period of time during which material business benefits are expected to arise from and/or material expenditures (including investments, running and retirement costs) are expected to be incurred by an investment programme
Hurdle rate—Required rate of return, above which an investment makes sense and below which it does not. Often based on the cost of capital, plus or minus a risk premium, and also often varied based upon prevailing economic conditions. Also known as required rate of return.
Internal rate of return (percent) (IRR)—The discount rate that equates an investment cost with its projected earnings. When discounted at the IRR, the present value of the cash outflow will equal the present value of the cash inflow. The IRR and NPV are measures of the expected profitability of an investment project.
Life cycle—A series of stages that characterise the course of existence of an organisational investment (e.g., product, project, programme)
Modelling—Developing a simplified representation of a system or phenomenon. Such representations may be static or dynamic, in which case behaviour of the system or phenomenon under different conditions can be simulated.
Net present value (in currency) (NPV)—Calculated by using an after-tax discount rate and a series of expected incremental cash outflows (the initial investment and operational costs) and cash inflows (cost savings or revenues) that occur at regular periods during the life cycle of the investment. Cash inflows accrued by the business up to about five years after project deployment should be taken into account to arrive at a fair NPV calculation.
Operational expenditure (OPEX)—Ongoing cost for running a product, business or system
Payback period (in months)—The length of time needed to recoup the cost of a capital investment. Financial amounts in the payback formula are not discounted. Note that the payback period does not take into account cash flows after the payback period and is, therefore, not a measure of the profitability of an investment project. The scope of the IRR, NPV and payback period is the useful economic life of the project up to a maximum of five years.
Portfolio—A grouping of objects of interest (investment programmes, IT services, IT projects, other IT assets or resources) managed and monitored to optimise business value
35© 2 0 1 0 I S A C A . A l l R I g h t S R e S e R v e d .
appendix a—TerminoloGy
Project and programme—In this document, a differentiation is made between the traditional use of the terms ‘project’ and ‘programme’, which is increasingly gaining wider acceptance. While it is recognised that enterprises may choose to use different terms, or have different definitions of those terms, in the interests of clarity the following definitions are used in this publication:• Project—A structured set of activities concerned with delivering a defined capability (that is necessary, but NOT
sufficient, to achieve a required business outcome) to the enterprise based on an agreed-on schedule and budget • Programme—A structured grouping of interdependent projects that is both necessary and sufficient to achieve a desired
business outcome and create value. These projects could include, but need not be limited to, changes in the nature of the business, business processes, the work performed by people as well as the competencies required to carry out the work, enabling technology, and organisational structure.
Return on investment (ROI)—A measure of operating performance and efficiency, computed in its simplest form by dividing net income by the total investment over the period being considered
Stage-gate—A point in time when a programme is reviewed and a decision is made to commit expenditures (funds) to the next set of activities on a programme or project, to stop the work altogether, or to put a hold on execution of further work
Total cost of ownership (TCO)—Includes original cost of the computer and software, hardware and software upgrades, maintenance, technical support, training and certain activities performed by users
Val IT—The standard framework for organisations to select and manage IT-related business investments and IT assets by means of investment programmes such that they deliver the optimal value to the organisation. Val IT is based on CoBiT.
Value—The relative worth or importance of an investment for an organisation, as perceived by its key stakeholders, expressed as total life cycle benefits net of related costs, adjusted for risk and (in the case of financial value) the time value of money
© 2 0 1 0 I S A C A . A l l R I g h t S R e S e R v e d .36
The Business Case Guide: usinG Val iT 2.0
AppendIx b—buSIneSS CASe
TemplateThe investment, category size, the impact if not successful, and position in the economic life cycle are factors that determine which components of the business case require greater attention and what level of detail is required. The following example illustrates an overall structure and content of a business case:• Cover sheet – Programme name – Business sponsor – Programme manager – Revision notes – Validation signatures – Approval signature• Executive summary – Programme context
• Name• Business sponsor• Track record of management team• Category of investment• Programme description/profile
– Synopsis of business case assessment • Programme contribution (value)• Programme plan and timing (schedule)• Change implications• Key risks• Comparative value summary
• Introduction/background – Opportunity and problem definition
• Problem to be addressed• Purpose• Strategic contribution
– Recommended solution • Scope• Business impact• Approach• Alternatives
– Value impact (attractiveness) – Financial and non-financial benefits
• Description• Measures• Accountabilities
– Costs (full economic life-cycle and full IT and business costs—best case, worst case, most likely case) – Organisational change implications (feasibility)
• Breadth and depth of change• Organisational capability and readiness
37© 2 0 1 0 I S A C A . A l l R I g h t S R e S e R v e d .
appendix B—Business Case
– Risks and assumptions and their mitigation (feasibility) • Delivery risks• Benefit risks
• Implementation approach – Programme plan, milestones and time frame – Programme dependencies – Enterprise architecture compliance – Security policy compliance – Critical success factors – Stage-gate funding requests – Resourcing requirements – Governance arrangements• Appendices – The Results Chain (or equivalent) – The detailed programme plan (including individual project plans) – The resourcing plan – The financial plan – The benefits realisation plan (including the benefits register) – The (organisational) change management plan – The risk management plan (including the risk register)
The template table of contents could be summarised to contain:• Executive summary• Introduction• Recommendations• Business attractiveness• Feasibility• Approach• Appendices
© 2 0 1 0 I S A C A . A l l R I g h t S R e S e R v e d .38
The Business Case Guide: usinG Val iT 2.0
Example
tAble of ContentS
Purpose of This Customer Relationship Management (CRM) Business Case Example 39Intended Audience 39Reference to The Business Case Guide: Using Val IT 2.0 39The Seven Principles of Val IT 391 Executive Summary 41 1.1 Programme Context 41 1.2 Synopsis of Business Case Assessment 41 1.3 Recommendation 412 Scope and Value Justification 42 2.1 Opportunity and Problem Definition 42 2.2 Strategic Contribution 42 2.3 Recommended Solution 42 2.4 Value Impact (Attractiveness) 44 2.5 Outcomes and Benefits 44 2.6 Financial Summary 45 2.7 Costs 47 2.8 Organisational Change and Customer Implications 47 2.9 Risks and Assumptions and Their Mitigation (Feasibility) 483 Implementation Approach 49 3.1 Programme Plan, Milestones and Time Frame 49 3.2 Programme Dependencies 49 3.3 Enterprise Architecture Compliance 50 3.4 Security Policy Compliance 50 3.5 Stage-gate Funding Requests 50 3.6 Resourcing Requirements 50 3.7 Governance Arrangements 504 Appendices 51 4.1 The Results Chain 51 4.2 Detailed Programme Plan 52 4.3 Resourcing Plan 52 4.4 Financial Plan 52 4.5 Benefits Realisation Plan 52 4.6 Organisational Change Management Plan 52 4.7 Risk Management Plan 53 4.8 Glossary of Terms 53
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appendix B—Business Case
Purpose of This Customer Relationship Management (CRM) Business Case ExampleThis example CRM business case is an abridged version of a business case used by a large Internet/telecom service provider. The business case was created for the introduction of new customer care processes by providing the necessary technical and business operational capabilities to deliver the expected business capabilities and, ultimately, the desired business outcomes.
The business case described here is altered for the purpose of being illustrative and to provide assistance to those who are looking for practical guidance in developing and maintaining business cases. It uses the concepts and principles of Val IT, specifically using the The Business Case Guide: Using Val IT 2.0. The intention of this business case example is to show that the business case is a valuable management tool—an operational tool—and to provide an overview of the content of a good practice business case based on Val IT 2.0.
Intended AudienceThis business case is applicable and scalable to all enterprises, regardless of industry sector or size and whether the enterprises are public or private, for profit or not for profit. This publication is intended to provide business and IT executives, organisational leaders, business sponsors and programme managers with an easy-to-follow example for getting from ‘why?’ through ‘what?’ to ‘how?’ with an illustrative example business case—a customer relationship management case.
Reference to The Business Case Guide: Using Val IT 2.0This example addresses the full life cycle of developing and maintaining a business case, which is fully addressed in the Val IT Investment Management (IM) domain, as explained in The Business Case Guide: Using Val IT 2.0. More specifically, the following IM processes are covered in the example business case:• IM1 Develop and evaluate the initial programme concept business case. (See section 2.1.)• IM2 Understand the candidate programme and implementation options. (See section 2.3.)• IM3 Develop the programme plan. (See chapter 3.)• IM4 Develop full life-cycle costs and benefits. (See sections 2.4, 2.5, 2.6 and 2.7.)• IM5 Develop the detailed candidate programme business case. (See chapter 2 and appendices.)• IM8 Update the business case. (See section 3.7.) The Seven Principles of Val ITVal IT supports the enterprise goal of creating optimal value from IT-enabled investments at an affordable cost and with an acceptable level of risk. As such, Val IT is guided by a set of seven principles—applied in the value management processes—that are enabled by key management practices and measured by performance against goals and metrics. These principles underpin the business case thinking and content.
These Val IT principles are detailed as follows (with related exhibits).
IT-enabled investments will:• Be managed as a portfolio of investments (illustrated in section 2.1).• Include the full scope of activities required to achieve business value (illustrated in sections 2.1 and 2.3).• Be managed through their full economic life cycle (illustrated in sections 2.3, 2.5 and 4.5).
Value-delivery practices will:• Recognise that there are different categories of investments that will be evaluated and managed differently.• Define and monitor key metrics and respond quickly to any changes or deviations (illustrated in section 4.5).• Engage all stakeholders and assign appropriate accountability for the delivery of capabilities and the realisation of business
benefits (illustrated in sections 3.7 and 4.5).• Be continually monitored, evaluated and improved (illustrated in sections 3.7 and 4.5).
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Business Case Example: 123 Service Provider (123SP) Programme Customer Connect!Document name: 123SP Programme CC Business CaseRelease : C1Date: 02-09-2009
Author(s) Programme Manager CC, COO 123SP
Business owner COO 123SP
Programme manager Programme Manager CC
Document Approval RecordApprovers
Name Role/Title Date Signature
CEO 123SP CEO 123SP 28 August 2009
COO 123SP COO 123SP, board member responsible for retail
28 August 2009
Head of Retail 123SP Head of Retail 28 August 2009
Reviewers
Name Role/Title Date Section Reviewed
Strategist 123SP GM, Group Strategy Director ALL
Finance 123SP GM, Consumer Finance ALL
CIO 123SP CIO ALL
Revision History
Version Revision date Summary of Changes Author
Draft 1 7 August 2009 Initial setup from template, integrating business case and programme plan into project initiation document
Programme Manager CC, COO 123SP
C1 6 September 2009 Some small textual changes, functional scope synchronised with assumptions, business case updates based on workshop results
Programme Manager CC, COO 123SP
Distribution List
Name Date of Issue Version
CEO 123SP, CFO 123SP, COO 123SP, Value Management Office 123SP, Programme Management Office 123SP
9 June 2009 C1
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appendix B—Business Case
1 Executive Summary
1.1 Programme ContextProgramme Customer Connect! (Programme CC) is one of four defined programmes within the enterprise business transformation portfolio established to build a new, lower-cost retail business model that will differentiate itself through superior products and customer experience.
Programme CC is directed at improving customer contact in order to cross-sell new products delivered by the overall transformation programme and to deliver self-service functionality. This strategic investment touches both the way the organisation acts as well as the tools that the organisation uses to keep track of its customers. The programme is conducted under the supervision of the director of the business transformation portfolio and under the responsibility of the COO 123SP and his team.
1.2 Synopsis of Business Case AssessmentProgramme CC has recently passed its feasibility phase, the results of which are described in this business case. The programme is expected to be delivered between 1 September 2009 and 15 February 2011. The seven-year net present value (NPV) for the covering programme is €24.5M positive.
The 123SP drivers for taking action are: • Increase competitive pressure in the domestic intellectual property (IP) market.• Access potential high market share of the new IP telecom market.• Improve customer retention average revenue per user (ARPUs).• Fulfil the need for new products.
Programme CC drives the organisation to boost the commercial potential of the new Triple Play functionality. With the enabling of customer information to the sales force and the provision of self-service for customers, the programme increases the revenue per customer. Beyond the significant software investment, the organisation should undergo a mindset change: expanding services to include ‘farming’ current customers, which will become more important than ‘hunting’ for new customers.
Four key risks are identified and mitigation is described in this document:• Delivery of the benefits of Programme CC later than competitors, potentially caused by a delay in the regulatory
liberalisation of the ‘copper last mile’, i.e., the final connection to the end user.• Cost exposure of the large information system (IS) integration• Time slippage caused by interdependency and/or integration challenge• CRM software delivery method different from method used by competitors
1.3 RecommendationThis programme is identified as critical to securing the long-term profitability of 123SP. Not executing Programme CC results in a non-competitive ability to cross-sell products, while (administrative) process costs are relatively high in comparison to those of competitors. In this scenario, the very existence of 123SP could be threatened. Alternatives result in the cutting back of 123SP’s retail activities and are considered undesirable.
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2 Scope and Value Justification
2.1 Opportunity and Problem Definition 123SP decided in the fourth quarter of 2008 to undertake a transformation to stay a top-three communications provider in a market that has become increasingly competitive. A number of programmes were defined as the business transformation portfolio, together aiming for a next-generation retail business model delivering:• A new, lower-cost operating model• Comprehensive Triple Play services to customers • Differentiation on customer experience• Superior product aggregation (bundling) capability• Residential gateway (RGW)-based ‘call and surf’ offers
Programme CC has been defined as one of the programmes of the business transformation portfolio. The goal of Programme CC is to deliver an improved customer service strategy to 123SP that supports the brand, business priorities and its culture, each enabling the company to cross-sell its future Triple Play products. This undertaking requires tight integration of information available in all customer-facing business units to give the customer a feeling of enjoying a unified service from 123SP.
At the same time, customer self-service facilities will be created to empower the customer in the administrative processes of 123SP. This lowers the cost base of the company as self-service will improve the revenue per minute of personal interaction of sales staff with the customer.
The purpose of this document is to describe the business case for Programme CC, by providing details about:• The business justification, business outcomes and financials that support the Programme CC business case• The drawdown of the €14.7M for completion of Programme CC, bringing total approved funding for the transformation
portfolio to €104M
2.2 Strategic ContributionThe Programme CC business case contributes to four strategic drivers of 123SP, which can be defined as follows:• Increased competitive pressure in the domestic IP market• Potential high market share of the new IP telecom market• Pressure on customer retention (ARPUs)• Need for new products
2.3 Recommended SolutionProgramme CC is directed at implementing and embedding a customer care strategy in 123SP. The recommended programme solution has two parts:• Delivery of technical capabilities—New, enabling CRM technology solutions and capabilities, including information
management• Delivery of operation capabilities—To optimise customer service in the organisation via streamlining customer-facing
processes, motivating and empowering staff, and developing new products and focussed sales campaigns
Programme CC ApproachProgramme CC commenced in late 2008 and has been progressed to the high-level plan shown in figure 9.
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Figure 9—Business Case Phases
Currently, Programme CC has to start the design phase. The outcomes and deliverables for each phase of the overall Programme CC programme are shown in figure 10.
Figure 10—Business Case Phase Outcomes and Deliverables
Phase Outcomes Deliverables
Feasibility • Results of the requirements analysis performed• Stakeholders aligned regarding goals of CRM
implementation • Vendor selection of business and technology
components to implement the customer care strategy
• Detailed requirements documents for the CRM tooling
• Business case and funding request for subsequent phases
• Sourcing party selected• Organisational change implications
Design • New processes of customer-facing part of the organisation
• Organisational change planned• Design and initial configuration of CRM tooling of
the vendor as selected earlier
• Target operational model (TOM)• Implementation approach
Build • Construction, installation and configuration of business and technology components to implement the customer care strategy
• Future business components tested by customers and employees to ensure that they operate as desired
• Training of employees for new business processes and tooling
IT and operational capabilities:• Physical and logical infrastructure required to
launch and operate the CRM system• Prototype of the system• Customer testing, business testing• Training for retail business operators• Initial prospect database• Operational business processes and
infrastructure
Operate • Continued development and enhancement of business components (i.e., offers, products, channels, processes, systems)
• Active cross-selling of products using holistic customer view
• Ongoing acquisition of customers• Delivery of financial returns to investors
Business capabilities:• Satisfied customers• Product usage• Cash to shareholders
Feasibility Design Build Operate
We are hereJanuary 2009
September2010
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AlternativesFigure 11 presents the alternative options that were considered in developing Programme CC in conjunction with group strategy, group technology and the executive managing the delivery risk.
Figure 11—Planning Alternatives in Developing Programme CC
Option Considered Rationale for Deciding Against the Option
Strategic Options
Exit retail Retail plays a key role in de-risking network assets.
Do not transform retail Seven-year NPV is significantly (€1bn+) below transformation scenarios, even with aggressive cost management.
Options around customer ‘push’ vs. ‘pull’ ‘Push’-based scenarios are less value-creating since significant discounts or customer incentives are required.
Architecture Options
Options around Programme CC architecture The proposed solution optimises: • Retail flexibility, synergies between other operating units• Cost to build and operate, and future road map flexibility
Delivery Options
Alternatives around release planning Proposed release plan of Programme CC represents an optimised view based on consideration of all delivery options.
2.4 Value Impact (Attractiveness)For this business case, the appraisal has been made regarding the benefits on one hand, and the costs and potential risks on the other. Based on this trade-off, we recommend investing in Programme CC for the following strategic reasons:• Programme CC is necessary to deliver a more customer-focussed organisation and to cross-sell products to existing
customers. Programme CC supports the overall transformation and reduces costs by enabling customer self-service functionality.
• Programme CC is widely supported within 123SP at all organisational levels. Management and staff of the organisation are aware of the need to change the customer engagement strategy.
• Customers are asking for better service (with fewer hand-offs) and new products.
2.5 Outcomes and BenefitsThis business case presents the specific impacts, outcomes and benefits that are expected to arise from Programme CC. It provides the justification for the programme investment. These outcomes are of three types:• Technology capabilities—The enabling technology will deliver to 123SP new technology hardware, software and
information management capabilities that will include: – Providing the ability to have a consistent, single view of the customer – Increasing quality, accuracy and availability (in real time) of customer information• Business operational capabilities—Leveraging the new technology capabilities, the Programme CC change initiatives
will deliver new business operational capabilities to 123SP. They lead (or contribute) to the desired business outcomes (or benefits). These expected outcomes include:
– Streamlining the customer care processes – Creating a transformed, satisfied, fully empowered workforce that is focussed on performance and customers – Increasing the empowerment by customers and citizens to engage with 123SP service delivery
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– Increasing staff satisfaction – Increasing staff capability to deliver customer services – Increasing quality of delivery in 123SP services to customers – Decreasing call handling time – Increasing first point of contact handling• Business outcomes (the benefits)—For Programme CC, the expected 123SP benefits include: – Increasing customer satisfaction as a result of better contact experience – Decreasing operational cost – Increasing Triple Play products revenue and market share – Increasing profitability
The business outcomes with financial implications form part of the NPV calculations of this business case. Outcome owners are identified as part of the benefits realisation plan process.
Figure 12 presents key selected non-financial and financial benefits.
Figure 12—Key Selected Non-financial and Financial Benefits
Outcome and Measure Rationale
Increased customer satisfaction• Programme CC offers an improved service experience over the
core consumer experience, which is measured by customer retention and loyalty.
Investment in products, systems and process automation will have the following direct customer benefits:• Fewer errors/greater accuracy• Customer self-service• Improved customer experience, which is essential to maintaining
ARPU and market share
Increased market share• Maintain a disproportionate share of the retail market value.• Achieve >50% of market share by volume by 2015. • Attract and retain above-average ARPUs from launch.
• Retail will be able to target higher-value customers where it can deliver higher profitability and long-term sustainability through added-value service offerings to raise or maintain ARPU.
• Retail’s brand positioning and product offers can be tailored to attract the highest value customer.
Increased retail profitability• Achieve sustainable profitability for retail. Maintain above-average
ARPUs from launch. • Improve product profitability throughout the product life cycle. • Reduce unit cost to serve from €115 per customer to €87 per
customer for fiscal year 2014-2015.
• Programme CC will reduce the cost of business through simplification and automation of processes and by enabling customer self-service, reducing headcount required for customer support and business functions.
2.6 Financial SummaryProgramme CC aims at a stand-alone seven-year NPV of €24.5M positive. The NPV analysis in figure 13 is based on a seven-year NPV to 2017. It takes into account the programme-derived cost reductions and revenues, OPEx and CAPEx. It excludes savings or value derived from the existing retail business.
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Figure 13—Programme CC NPV Analysis
All values in €000s Excluding Retained Revenue NPV (7 years) 24.5 millionDiscounted payback year Year 7IRR % 31%WACC % 9.9%
Revenue & Operating Costs 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016 TOTALRevenue (total) 0 0 14,850 152,655 388,907 632,419 854,702 10,863,874 12,907,407
Revenue (incremental) 0 0 14,850 152,655 388,907 632,419 854,702 10,863,874 12,907,407
Revenue (retained) 0 0 0 0 0 0 0 0 0
Operating expenditure 0 0 52,312- 227,563- 390,620- 582,473- 750,770- 9,478,584- 11,482,322-
Summary EBITDA 0 0 37,462- 74,907- 1,713- 49,947 103,932 1,385,290 1,425,085
EBIT 0 8,643- 54,570- 100,065- 33,784- 11,867 62,492 1,333,420 1,210,717
ROIC 0 0 0 1- 0 0 1 6
EVA 1,418- 10,994- 46,628- 80,399- 34,358- 1,388- 35,871 916,927 777,614
Investment Required Capital expenditure 27,260- 49,196- 43,566- 35,720- 28,364- 22,259- 22,259- 236,288- 464,912-
EBITDA = earnings before interest, taxes, depreciation and amortization; EBIT = earnings before interest and taxes; ROIC = return on invested capital; EVA = economic value added
Key AssumptionsThe following are some key assumptions used in performing the financial modelling in figure 13.
Capital Investment• WACC of 9.9 percent, in accordance with group finance, has been used.• Ongoing capital investment in the retail division for incremental product, platform and process development and
maintenance is €21.9M per post-build.
Revenue Forecasts• Other product and capability development programmes as part of the transformation portfolio are delivered on time and to
the expected standard that allows the retail division to easily integrate and launch end-user offers.
Operating Costs Forecasts• Cost of sales: – Wholesale product inputs have been included at regulated prices. – The managed infrastructure product input costs have been treated as a product input cost and estimated to have an eight-
year useful life.• Cost to serve: – Unit cost to serve is projected to be high initially due to up-front investment and operating costs associated with
technology platforms. – Channel costs forecasts include the assumption that 75 percent of contact centre volumes are handled by offshore contact
centres, which are significantly cheaper than onshore contact centres.
Terminal Value Estimation• Terminal value has been included as a capital inflow in 2016 for the purposes of financial modelling.
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2.7 Costs The costs of the stages of Programme CC amount to almost €14.8M (most likely situation). Figure 14 shows the costs in most likely, worst-case and best-case situations. For the purpose of this analysis, the costs for the build and operate stages only are presented in detail.
Figure 14—Most Likely, Worst-case and Best-case Situations
Costs of Complete Programme Customer Connect
Stage Most Likely Worst-case Best-case
Feasibility a570,660 a741,858 a485,061
Design a885,799 a1,151,538 a752,929
Total Feasibility and Design a1,456,459 a1,893,396 a1,237,990
Detailed build and operate IS labour supplier Software Hardware
a2,798,908 1,095,348 906,100
a3,638,580 1,423,953 1,177930
a2,379,072 931,046 770,185
Subtotal—IS a4,800,356 a6,240,463 a4,080,303
Product aggregation: Supplier Vendor and suppliers
a229,633 912,500
a298,523 1,186,250
a195,188 775,625
Subtotal—Product aggregation a1,142,133 a1,484,773 a970,813
Business build: 123SP business resources Supplier labour Travel and accommodation External consultants Marketing communications and research Other
a1,430,837 1,146,256 510,380 2,072,699 414,227 366,898
a1,717,004 1,850,221 663,493 3,294,509 678,495 476,967
a1,287,753 704,052 433,823 2,761,794 282,092 311,863
Subtotal—Business build and operate a5,941,297 a8,680,689 a5,781,377
Capital interest a256,852 a333,097 a218,324
Contingency a1,188,259 a1,392,737 a898,725
Subtotal—Capital Interest and Contingency a1,445,111 a1,725,834 a1,117,049
Total Detailed Build and Operate a13,328,897 a18,131,759 a11,949,542
Total Feasibility and Design a1,456,459 a1,893,396 a1,237,990
Total Detailed Build and Operate a13,328,897 a18,131,759 a11,949,542
Grand total a14,785,356 a20,025,155 a13,187,532
2.8 Organisational Change and Customer Implications This business case recognises that without the successful undertaking of organisational change necessitated by the Programme CC initiatives, there can be no expectation as to the realisation of the expected outcomes and benefits.
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During the feasibility phase, an assessment of the organisational change implications has been performed. Key findings of this assessment were that Programme CC:• Requires substantial business change as processes will be changed• Will impact sales representatives within all retail units of 123SP• Will impact how customers engage with 123SP
Specifically, the organisational change implications include those involving impact on 123SP’s staff and customers:• Staff: – Communication concerning the purpose, impact and plan of the programme – Re-skilling of sales representatives and sales support staff in the new customer engagement processes and technologies – Changes to the sales representative remuneration structure – Out-placement of staff displaced by the programme• Business processes: – New business processes around customer engagement and service• Organisational structure: – Restructuring of sales delivery and support functions within 123SP as a consequence of the new business model for
customer care• 123SP’s engagement with its customers: – Programme CC is a significant customer-facing change. The perception and reaction of the customer will be important to
the realisation of the expected benefits. During the programme execution, effort will be focussed on understanding and improving the customer experience—specifically concerning requirements, testing and, ultimately, the operation of the new customer care model and strategy. Key initiatives have been identified and funded regarding communications with customers on the changes of how 123SP will engage with them as a consequence of Programme CC.
A formal organisational change management plan (refer to 4.6) has been completed to address and co-ordinate the actions needed to successfully address Programme CC organisational change.
2.9 Risks and Assumptions and Their Mitigation (Feasibility)Currently, there are 27 open risks in Programme CC’s risk register. The most critical risks, treatment options for these risks and status of risk treatment will be reported as part of routine programme reporting. A quarterly independent risk review will be carried out, reporting to the CEO. For our treatment of risk, we differentiate between benefit and delivery risks. At the highest level, a sample of significant risks that are identified are shown in figure 15.
Figure 15—Sample of Significant Risks
Risk Risk Type Mitigation
Delivery of the benefits of Programme CC later than competitors, potentially caused by delay in regulatory liberalisation of ‘copper last mile’
Benefit risk • Economics of competition under separation provide a structural hedge.• Retail prepares for ‘best efforts’ as well as a high-quality primary voice.
Methodology of CRM software delivery (Programme CC’s method differs from that of others)
Delivery risk • Comprehensive communications and stakeholder management plan is in place.
• The iterative release approach allows effective issue treatment.
(A more detailed list of the high-impact risks is not included for the purpose of this document.)
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3 Implementation Approach
3.1 Programme Plan, Milestones and Time FrameProgramme CC was initiated in the fourth quarter of 2008. The high-level programme planning is represented in the Gantt chart in figure 16.
Figure 16—High-level Programme Planning Gantt Chart
ID Task NameStartDate
FinishDate
2008 2009 2010 2011Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q3
1 Feasibility 3-11-2008 1-9-20092 Pain management, strategic business/CRM link 3-11-2008 27-2-20093 Program sponsorship and resource mobilisation 3-11-2008 27-2-20094 Workshop 27-2-2009 1-4-20095 Phasing, priority and objective consensus 1-4-2009 1-5-20096 Definition of business case 1-5-2009 1-9-20097 Definition of business processes and metrics 1-5-2009 1-9-20098 Definition of legacy environment 1-5-2009 1-9-20099 Definition of requirements 1-5-2009 1-9-2009
10 Vendor selection 1-5-2009 1-9-200911 Design/Build 1-9-2009 31-5-201012 CRM system configuration 1-9-2009 31-5-201013 Release 1.1 1-9-2009 30-10-200914 Release 1.2 30-10-2009 27-1-201015 Release 1.3 27-1-2010 10-3-201016 Release 1.4 10-3-2010 31-5-201017 Business change 1-9-2009 1-4-201018 Workshops 1-2-2010 1-4-201019 Security and control 1-2-2010 30-4-201020 Setup of support infrastructure 1-2-2010 30-4-201021 Operate 3-5-2010 15-2-201122 Execution of pilot 3-5-2010 1-7-201023 Evaluation of pilot and modifications 1-7-2010 13-8-201024 Rollout 16-8-2010 31-12-201025 Assessment of results 3-1-2011 15-2-2011
3.2 Programme DependenciesTwo categories of dependencies are defined for Programme CC: within and outside 123SP. Examples include: • Dependencies within the organisation: – Programme CC is dependent on the progress of the overall transformation portfolio, which incudes enterprise systems,
revenue assurance, billing and the technical programmes. • Dependencies outside the organisation: – Programme CC is dependent on the liberalisation of the telecom market. In 2010, the ‘last mile’ between the network
and customers is expected to be liberalised (estimate first quarter of 2010). This programme is dependent on the promulgation of that regulation.
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3.3 Enterprise Architecture ComplianceThis section presents the reviews and authorisations performed in accordance with the company’s technology authority processes, covering the enterprise, information and technical architecture processes. (For the purpose of this example business case, the enterprise architecture compliance is not further detailed).
3.4 Security Policy Compliance123SP has recently documented a security policy (v2.3) describing requirements for access rights and security protocols. During the security and control activity (see 3.1), the identity and access management functionality is configured for all new CRM-related applications in the IS landscape of 123SP. The security audit activities will include a security check for the new environment.
3.5 Stage-gate Funding RequestsThis business case specifically requested release of €14.7M by the CEO to deliver Programme CC. Subsequent draw-down business cases expected are:• Programme CC design phase—Approximately €885,000 requested now• Programme CC build and operate phases—Approximately €13.3M requested in the fourth quarter of 2009
In addition to the funding of Programme CC, additional investments may be required to integrate Programme CC with related product development (e.g., new mobile phone offerings). These will be detailed in the future since this business case is directed at the design phase and because the funding requirements for additional investments will not be known until after the design phase is completed.
3.6 Resources RequiredThe resources required are defined for Programme CC in accordance with the programme phases as follows:• Design: – Senior management – Stakeholder representatives – Programme manager – Programme team (123SP and external consultant) – Requirement engineers (external) • Build: – Senior management – Stakeholder representatives – Programme manager(s) – Programme team (123SP and external consultant) – Time of most important stakeholders in customer process (change process) – Technical programmers/configuration experts (external) – Change consultants – Test consultants
3.7 Governance ArrangementsThe head of retail and the portfolio manager of the business transformation portfolio will conform to the integrated governance model that has been proposed for high-level governance and resolution of major business issues.
The overall business owner for retail is the 123SP COO. Day-to-day decision making is delegated to the portfolio manager of the business transformation portfolio. Programme CC is managed by the programme manager for CC.
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The programme will follow the internal programme office reporting and management policies. According to these portfolio governance arrangements and in compliance with 123SP programme management methodology, each programme within the business transformation portfolio will be governed based on the programme planning; delivered and expected milestones; and cost, expenditures and (intermediate) outcomes related to the business case. An update of the Programme CC business case to reflect the current status will be provided at each delivery phase and whenever there is any change that significantly affects the projected costs, benefits, opportunities or risks.
4 Appendices
4.1 The Results ChainIn developing the overall understanding of scope of initiatives and their contribution to the outcomes for Programme CC, the Results Chain in figure 17 was constructed. This provides a road map to understand the linkage of the technical capabilities and the business operational capabilities to the business outcomes.
Figure 17—Results Chain
Business Processes Streamlined
Motivated, Satisfied and Empowered 123SPSales Force
Development of NewCRM Capability
Development of New Triple Play Products and Focussed
Sales Campaigns
Customer Care Impacts
(Customer-focussedOrganisation)
123SP Revenue ImpactsContribution to 123SPStrategic Outcomes
Introduce Customer Self-Service—Empowerment
Results Chain for theProgramme CC
O-15Consistent,
single view ofthe customercreated with
the CRMcapability
I-10Customer careprocesses are
redesigned andimplemented.
I-7Training and
awareness for salesstaff are offered—New customer care
processes andsystems.
I-8Sales force
motivation andremunerationchanges are
made.
I-9Redesign the
123SP businessmodel—Establish
offshorecustomer centre.
O-12Efficiency ofsales force
increased—Morecustomer-facing
time
O-13 Staffempowered to
engage withcustomers—
Increased staffsatisfactionO-14
Customercare
processes streamlined
0-10Increased
understandingof customer’srelationship
O-11Quality,
accuracy andavailability of
customerinformation increased
I-4New focussed
salescampaigns
are developed.
O-9More effectrive
sales campaignsand products
created
O-8Increasedquality ofservice tocustomers
1-11Develop and
roll outcustomer
self-service.
O-6Increased
lead/conversionand cross-
sell
O-5Revenue forTriple Playproducts increased
O-3Decreasedoperational
costs
O-2 Increased
profitability
O-1Marketshare
increased
O-4Customerability to
directly accessself-services
increased
O-7Customer
satisfaction,retention and
loyalty increased—Feeling of unified
service
I-6Customer
awareness andengagement/
promotionactions are taken.
Assumption:Regulatory
consent delaysdo not affect
time to market.
Assumption:Products developed
by othertransfomation
programmes aredelivered on
time.
Assumption:79 percent ofcustomer care
handling isconducted offshore.
Assumption:Wholesale
inputs remain at regulated
prices.
I-5Develop andlaunch newTriple Playproducts.
I-3Customer datamanagementis addressed.
I-1Single view ofthe customer
is created withinformation
management.
I-2CRM technical
solution isdeveloped andimplemented
(with associatedIT hardware).
Note: Numbers are for identification purposes only and do not imply sequence or importance: I-x for Initiatives, O-x for outcomes.
© 2 0 1 0 I S A C A . A l l R I g h t S R e S e R v e d .52
The Business Case Guide: usinG Val iT 2.0
4.2 Detailed Programme PlanThe table of contents of the programme plan is structured as follows and will cover:• Scope of programme• Programme milestones• Outline of projects and key initiatives• Programme methods• Programme schedule • Programme owners/managers/stakeholders• Programme management structure 4.3 Resourcing PlanPrecise planning details will be reviewed every three months. 4.4 Financial PlanThe financial implication of this business case is described in sections 2.6 and 2.7. 4.5 Benefits Realisation PlanBased on the parameters included in the Results Chain (section 4.1), a detailed benefits realisation plan has been defined. The plan is presented in figure 18 (simplified sample only) and details the targeted outcome, metrics and targets to be monitored—these will guide and manage the business benefits realisation of Programme CC. Performance against target metrics should also drive necessary corrective action.
Figure 18—Benefits Realisation Plan
Outcome and Results (Chain ID) Metric Target and Profile Accountability
Increased customer satisfaction (O-7)
Retention/loyalty, measured as part of customer satisfaction (CSAT) surveys
Current: xx%; 2016 target yy% Head of Retail
Increased Triple Play revenue (O-5)
Total new product sales, extracted from general ledger
2016 target (xM) Head of Retail
4.6 Organisational Change Management PlanProgramme CC, as a major transformation investment within 123SP, will necessitate close executive attention to the people/process/organisation issues. A formal plan must be in place. The change management plan is designed to identify and actively manage the issues of change related to Programme CC. It is required to:• Define the structure for change management and change leadership.• Build the change management programme.• Develop a detailed change management plan. The table of contents for the change management plan will be structured as follows and will cover:• Key change requirements• Approach to change• Change obstacles• Stakeholders and their management• Change management team role and composition• Communications approach• Change planning and activities
53© 2 0 1 0 I S A C A . A l l R I g h t S R e S e R v e d .
appendix B—Business Case
4.7 Risk Management PlanThe key areas of risk that need to be considered as part of the business case process include:• Risks that impact the level of certainty of project delivery of the agreed-on scope at the agreed-on level of quality within
the agreed-on time and cost parameters• Risks that will impact the effectiveness of delivery of the overall planned business benefits or degree of alignment of the
benefits delivered with the agreed-on business strategy• Environmental and stakeholder risks external to Programme CC that may reduce programme effectiveness or otherwise
diminish the value of the programme
A formal risk register has been established to manage the risk management plan.
4.8 Glossary of Terms123SP—Leading communications provider of a G20 country
ARPU—Average revenue per user
CAPEX and OPEX—CAPEx (capital expenditures) refers to the cost of developing a product or system and OPEx (operating expenditures) refers to the ongoing costs for running a product or system5.
Customer Relationship Management (CRM)—Way to identify, acquire and retain customers. CRM is also an industry term for software solutions that help an organisation manage customer relationships in an organised manner.
Programme CC—Programme Customer Connect! is the programme of IT-enabled business change for customer care. It is the investment programme being requested for enabling technology and organisational change that 123SP will use to drive the engagement, servicing and satisfaction of customers.
Results Chain™—Reasoning model that illustrates how specific outcomes can be associated with one or more initiatives and how their realisation is possible in a specific organisational context. It graphically represents, as a logical map, the shared understanding of the business change journey and the benefits realisation process.
The model reflects the scope and impact of change and can be used to guide programme/project design and planning as well as to map programme/project portfolios to the organisational strategic objectives.
The Results Chain term is trademarked by Fujitsu Consulting. For more information, refer to ISACA’s publication on Getting Started With Value Management (appendix C)6.
Triple Play products—Communications industry term for the provisioning over a single broadband connection of two bandwidth-intensive services7.
Weighted Average Cost of Capital (WACC)—Used in finance to measure a firm’s cost of capital. This has been used by many firms in the past as a discount rate for financed projects since the cost of financing (capital) is regarded by some as a logical discount rate (required rate of return) to use. WACC is the return a firm must earn on existing assets to keep its stock price constant and satisfy its creditors and owners8.
5 Source: The Free Dictionary by Farlex, www.thefreedictionary.com6 ISACA, Enterprise Value: Governance of IT Investment: Getting Started With Value Management, USA, 20087 Source: Telecommunications Industry Association (TIA), http://www.tiaonline.org8 Source: The Free Dictionary by Farlex, www.thefreedictionary.com
© 2 0 1 0 I S A C A . A l l R I g h t S R e S e R v e d .54
The Business Case Guide: usinG Val iT 2.0
B
usin
ess
Case
Mat
urity
(con
t.)
Mat
urity
Lev
el, T
itle
and
Desc
riptio
n
0 No
n-ex
iste
nt1
Initi
al/A
d Ho
c2
Repe
atab
le
but I
ntui
tive
3 De
fined
4 M
anag
ed a
nd
Mea
sura
ble
5 Op
timis
ed
IT c
ost f
ocus
—In
divi
dual
de
scrip
tion
of IT
pr
ojec
t/sol
utio
n w
ith
broa
d st
atem
ents
of
deliv
ery
outc
omes
, de
velo
ped
by IT
with
pr
imar
y fo
cus
on
initi
al IT
spe
ndin
g
Som
e bu
sine
ss
enga
gem
ent a
nd
focu
s—So
me
sele
ctio
n of
IT
proj
ect/s
olut
ion/
serv
ice
deliv
ery
with
mor
e sp
ecifi
c ou
tcom
es w
ith s
ome
finan
cial
met
rics,
de
velo
ped
by IT
w
ith s
ome
busi
ness
en
gage
men
t with
so
me
cons
ider
atio
n of
ong
oing
IT c
osts
Prog
ram
me
man
agem
ent—
Sele
ctio
n an
d lim
ited
man
agem
ent
base
d on
em
ergi
ng
busi
ness
cha
nge
and
prog
ram
me
view
with
full
IT
cost
s an
d so
me
busi
ness
cos
ts o
ver
som
e ar
bitra
ry ti
me
perio
d, d
evel
oped
by
IT a
nd b
usin
ess
with
cle
ar ro
les
and
resp
onsi
bilit
ies
Acco
unta
bilit
y an
d va
lue—
Cate
goris
atio
n of
inve
stm
ents
w
ith s
elec
tion
of
prog
ram
mes
bas
ed
on v
alue
with
cle
ar
acco
unta
bilit
y an
d m
anag
ed fo
r a
defin
ed p
erio
d of
tim
e
Dyna
mic
thro
ugh
the
full
econ
omic
lif
e cy
cle—
Dyna
mic
m
anag
emen
t of t
he
resu
lting
ass
ets
over
th
e fu
ll ec
onom
ic
life
cycl
e
Aspe
ct o
f Mat
urity
(a) C
larit
y of
ou
tcom
esLi
mite
d ap
plic
atio
n an
d no
con
sist
ency
fo
r any
of t
hese
at
tribu
tes
in
com
pila
tion
of
busi
ness
cas
es
Broa
d st
atem
ents
as
to th
e de
liver
y ou
tcom
es a
nd
limite
d m
etric
s,
mai
nly
arou
nd
finan
cial
s
Mor
e sp
ecifi
c ou
tcom
es, a
lthou
gh
larg
ely
deliv
ery-
base
d; s
ome
met
rics,
but
mos
tly
finan
cial
All d
eliv
ery
outc
omes
and
mor
e co
mpl
ete
bene
fits
outc
omes
, alth
ough
m
ainl
y fin
anci
al
met
rics;
lim
ited
use
of le
ad m
etric
s fo
r jo
urne
y ou
tcom
es
All o
utco
mes
(d
eliv
ery
and
bene
fits)
des
crib
ed,
with
fina
ncia
l m
etric
s an
d lim
ited
non-
finan
cial
m
etric
s; s
ome
cont
ribut
ion
of
jour
ney
outc
omes
to
end
bene
fits
All o
utco
mes
cle
arly
an
d un
ambi
guou
sly
desc
ribed
, with
re
leva
nt fi
nanc
ial
and
non-
finan
cial
m
etric
s; c
ompl
ete
unde
rsta
ndin
g of
how
jour
ney
outc
omes
con
tribu
te
to s
trate
gic
outc
omes
App
end
Ix C
—d
etA
Iled
mA
tuR
Ity
mo
del
55© 2 0 1 0 I S A C A . A l l R I g h t S R e S e R v e d .
appendix C—deTailed maTuriTy model
Bus
ines
s Ca
se M
atur
ity (c
ont.)
Mat
urity
Lev
el, T
itle
and
Desc
riptio
n
0 No
n-ex
iste
nt1
Initi
al/A
d Ho
c2
Repe
atab
le
but I
ntui
tive
3 De
fined
4 M
anag
ed a
nd
Mea
sura
ble
5 Op
timis
ed
Aspe
ct o
f Mat
urity
(con
t.)
(b) F
ocus
Lim
ited
appl
icat
ion
and
no c
onsi
sten
cy
for a
ny o
f the
se
attri
bute
s in
co
mpi
latio
n of
bu
sine
ss c
ases
Focu
s pr
imar
ily o
n IT
cos
tPr
imar
y fo
cus
on
IT c
osts
with
som
e co
nsid
erat
ion
for
finan
cial
wor
th a
nd
risk
Prim
ary
focu
s on
co
sts
(IT a
nd s
ome
busi
ness
cos
ts) w
ith
som
e rig
our a
roun
d bu
sine
ss w
orth
an
d w
ith b
asic
risk
un
ders
tand
ing
Focu
s on
val
ue,
incl
udin
g st
rate
gic
alig
nmen
t, to
tal
cost
s (IT
and
bu
sine
ss),
busi
ness
w
orth
(prim
arily
fin
anci
al) a
nd
adju
sted
for b
oth
bene
fits
and
deliv
ery
risk;
use
d fo
r man
agin
g th
e pr
ogra
mm
e.
Focu
s on
val
ue,
incl
udin
g st
rate
gic
alig
nmen
t, to
tal c
ost
(IT a
nd b
usin
ess)
, bu
sine
ss w
orth
(b
oth
finan
cial
and
no
n-fin
anci
al) a
nd
adju
sted
for b
oth
bene
fits
and
deliv
ery
risk;
trea
ted
as a
liv
ing
docu
men
t and
re
actin
g to
cha
nges
(c) S
cope
(dep
th)
Prim
arily
IT p
roje
ct/
solu
tion
deliv
ery
IT p
roje
ct/s
olut
ion
and
serv
ice
deliv
ery
IT s
olut
ion
and
serv
ice
deliv
ery
with
so
me
reco
gniti
on
of b
usin
ess
chan
ge a
nd s
ome
reco
gniti
on o
f pr
ogra
mm
e vi
ew
IT s
olut
ion
and
serv
ice
deliv
ery
with
som
e bu
sine
ss
chan
ge in
clud
ed;
prog
ram
me
view
ad
opte
d
Scop
e is
IT s
olut
ion
and
serv
ice
deliv
ery,
an
d al
l ass
ocia
ted
busi
ness
cha
nge
as
a pr
ogra
mm
e.
(d) L
ife c
ycle
(len
gth)
Cove
rs in
itial
sp
endi
ngCo
vers
initi
al
spen
ding
and
som
e on
goin
g se
rvic
e co
sts
Cove
rs in
itial
sp
endi
ng a
nd
ongo
ing
serv
ice
cost
s fo
r an
arbi
trary
tim
e pe
riod
Cove
rs in
itial
sp
endi
ng a
nd
ongo
ing
serv
ice
cost
s at
cus
tom
ised
tim
e fra
mes
for
diffe
rent
type
s of
in
vest
men
ts
Cove
rs to
tal
spen
ding
and
val
ue
thro
ugh
the
full
econ
omic
life
cyc
le
(e) A
ccou
ntab
ility
IT-d
evel
oped
an
d ow
ned;
lim
ited
busi
ness
in
volv
emen
t
IT-d
evel
oped
an
d ow
ned,
with
in
crea
sing
bus
ines
s in
put;
uncl
ear r
oles
an
d re
spon
sibi
litie
s
Busi
ness
and
IT
hav
e cl
ear
resp
onsi
bilit
ies
for d
evel
opm
ent
of b
usin
ess
case
an
d ac
coun
tabi
lity
for a
ppro
val i
s es
tabl
ishe
d.
Clea
r acc
ount
abili
ty
for o
utco
mes
by
busi
ness
; IT
has
clea
r acc
ount
abili
ty
for t
echn
olog
y de
liver
y.
Busi
ness
ow
ns,
deve
lope
d in
pa
rtner
ship
with
IT
; acc
ount
abili
ty
acce
pted
(cas
cade
d)
thro
ugh
the
orga
nisa
tion
thro
ugh
the
full
econ
omic
lif
e cy
cle.
(f) U
se
Indi
vidu
al
desc
riptio
nIn
divi
dual
de
scrip
tion
and
sele
ctio
n
Sele
ctio
n an
d lim
ited
man
agem
ent
Sele
ctio
n an
d m
anag
emen
tSe
lect
ion
and
full
econ
omic
life
-cyc
le
man
agem
ent
© 2 0 1 0 I S A C A . A l l R I g h t S R e S e R v e d .56
The Business Case Guide: usinG Val iT 2.0
Bus
ines
s Ca
se M
atur
ity (c
ont.)
Mat
urity
Lev
el, T
itle
and
Desc
riptio
n
0 No
n-ex
iste
nt1
Initi
al/A
d Ho
c2
Repe
atab
le
but I
ntui
tive
3 De
fined
4 M
anag
ed a
nd
Mea
sura
ble
5 Op
timis
ed
Valu
e of
this
leve
lBu
sine
ss c
ase
prov
ides
info
rmat
ion
to m
anag
e IT
sco
pe
and
initi
al c
osts
of
the
inve
stm
ent.
Busi
ness
cas
e pr
ovid
es s
ome
busi
ness
out
com
es
info
rmat
ion
to
enab
le a
sses
smen
t of
bus
ines
s va
lue
(alth
ough
in
com
plet
e).
Busi
ness
cas
e w
ith a
pro
gram
me
view
pro
vide
s de
cisi
on m
akin
g w
ith a
full
scop
e of
cos
ts, b
usin
ess
enga
gem
ent a
nd a
n un
ders
tand
ing
of
the
busi
ness
cha
nge
and
valu
e.
Busi
ness
cas
e su
ppor
ts p
rogr
amm
e st
akeh
olde
rs in
de
cisi
on-m
akin
g an
d re
view
pr
oces
ses,
with
co
st, r
isk,
cha
nge
and
mos
t val
ue
aspe
cts
addr
esse
d.
Dyna
mic
bus
ines
s ca
se a
llow
s st
akeh
olde
rs to
id
entif
y no
n-de
liver
y of
val
ue a
nd to
re
allo
cate
fund
ing
from
pro
gram
mes
w
here
val
ue is
no
long
er g
oing
to b
e ac
hiev
ed to
oth
er
mor
e va
luab
le
prog
ram
mes
in th
e po
rtfol
io.
Risk
of s
tayi
ng a
t th
is le
vel
Deci
sion
s m
ade
with
alm
ost n
o pe
rspe
ctiv
e of
bu
sine
ss v
alue
—se
en a
s IT
cos
t de
cisi
on
Deci
sion
s m
ade
with
par
tial
unde
rsta
ndin
g an
d pe
rspe
ctiv
e of
bu
sine
ss v
alue
—st
ill p
rimar
ily
seen
as
IT c
ost
auth
oris
atio
n
Deci
sion
s ar
e ba
sed
on s
tatic
info
rmat
ion
of c
ost a
nd v
alue
, an
d no
t upd
ated
on
ce a
ppro
ved—
seen
as
once
-off
use
for d
ecis
ion
mak
ing
Lim
ited
capa
bilit
y to
se
nse
and
resp
ond
to c
hang
es in
the
prog
ram
me
deliv
ery
and
valu
e du
ring
its li
fe c
ycle
—so
op
portu
nitie
s to
co
rrec
t and
opt
imis
e va
lue
are
lost
.
N/A
57© 2 0 1 0 I S A C A . A l l R I g h t S R e S e R v e d .
appendix C—deTailed maTuriTy model
Bus
ines
s Ca
se M
atur
ity (c
ont.)
Mat
urity
Lev
el, T
itle
and
Desc
riptio
n
0 No
n-ex
iste
nt1
Initi
al/A
d Ho
c2
Repe
atab
le
but I
ntui
tive
3 De
fined
4 M
anag
ed a
nd
Mea
sura
ble
5 Op
timis
ed
Posi
tives
at t
his
leve
lIn
itial
IT c
osts
for
stak
ehol
ders
and
de
cisi
on m
aker
s ar
e un
ders
tood
.
Busi
ness
en
gage
men
t pr
ovid
es s
ome
pers
pect
ives
of
busi
ness
out
com
es;
incl
udes
mor
e co
mpl
ete
IT c
osts
.
Busi
ness
en
gage
men
t and
ac
cept
ance
of
acco
unta
bilit
ies
and
resp
onsi
bilit
ies
—m
oved
bey
ond
only
IT; c
onta
ins
busi
ness
val
ue
info
rmat
ion
that
in
form
s de
cisi
on
mak
ing.
Stak
ehol
ders
hav
e a
reas
onab
ly c
ompl
ete
unde
rsta
ndin
g an
d pi
ctur
e of
the
cost
/ris
k/va
lue
pers
pect
ive
of th
e pr
ogra
mm
e.
This
ena
bles
th
em to
:•
Man
age
scop
e.•
Man
age
the
real
isat
ion
of
the
busi
ness
ou
tcom
es.
• Ha
ve IT
and
th
e re
st o
f the
bu
sine
ss m
ostly
on
‘the
sam
e pa
ge’.
Deci
sion
mak
ers
have
reas
onab
ly
com
plet
e in
form
atio
n ne
eded
fo
r inf
orm
ed
deci
sion
mak
ing.
En
terp
rise
has
abili
ty to
pic
k th
e w
inne
rs a
nd re
duce
va
lue
leak
age.
Stak
ehol
ders
ha
ve a
com
plet
e an
d cu
rren
t un
ders
tand
ing
and
pict
ure
of th
e co
st/r
isk/
valu
e pe
rspe
ctiv
es o
f the
pr
ogra
mm
e.
This
ena
bles
th
em to
:•
Man
age
scop
e an
d m
ake
bette
r ch
oice
s du
ring
the
life
cycl
e of
the
prog
ram
me.
• M
ore
effe
ctiv
ely
man
age
the
real
isat
ion
of th
e ou
tcom
es.
• En
sure
IT a
nd
the
rest
of t
he
busi
ness
are
al
way
s on
‘the
sa
me
page
’.
Deci
sion
mak
ers
have
com
plet
e an
d cu
rren
t inf
orm
atio
n ne
eded
for i
nfor
med
de
cisi
on m
akin
g an
d to
be
able
to
revi
sit t
hose
de
cisi
ons.
Thi
s w
ill s
treng
then
the
ente
rpris
e’s
abili
ty
to p
ick
the
win
ners
an
d to
redu
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© 2 0 1 0 I S A C A . A l l R I g h t S R e S e R v e d .58
The Business Case Guide: usinG Val iT 2.0
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59© 2 0 1 0 I S A C A . A l l R I g h t S R e S e R v e d .
referenCes
RefeRenCeS
Butler Group, ‘Measuring IT Costs and Value’, September 2005
Curley, M.; Managing Information Technology for Business Value: Practical Strategies for IT and Business Managers, Intel Press, USA, 2004
De Haes, Steven; Wim Van Grembergen; ‘An Exploratory Study Into the Design of an IT Governance Minimum Baseline Through Delphi Research’, Communications of the Association of Information Systems, vol. 22, 2008
Finnerty, J.D.; Project Financing: Asset-based Financial Engineering, John Wiley & Sons, USA, 1996
The Free Dictionary by Farlex, www.thefreedictionary.com
Gartner, ‘The Elusive Business Value of IT’, August 2002
IBM Institute for Business Value, ‘Reaching Efficient Frontiers in IT Investment Management’, IBM Global Services, USA, 2004
ING Investor Relations, ‘IT Investment and Shareholder Return’, ING Shareholders Bulletin, vol. 12, no. 2, May 2004, www.seaquation.com
ISACA, Board Briefing on IT Governance, 2nd Edition, USA, 2003, www.isaca.org
ISACA, Enterprise Value: Governance of IT Investment: Getting Started With Value Management, USA, 2008, www.isaca.org
ISACA, Enterprise Value: Governance of IT Investments: The Val IT™ Framework 2.0, USA, 2008, www.isaca.org
ISACA, Optimising Value Creation From IT Investments, USA, 2005, www.isaca.org
IT Governance Institute, IT Governance Global Status Report 2008, ISACA, USA, 2008, www.isaca.org
Kan, Alexander Rinooy; ‘IT Governance and Corporate Governance at ING’, Information Systems Control Journal, vol. 2, 2004
Lutchen, M.D.; Managing IT as a Business, John Wiley & Sons, USA, 2004
META Group, ‘Portfolio Management and the CIO, Part 3’, March 2002
Nolan, R.; F.W. McFarlan; ‘Information Technology and the Board of Directors’, Harvard Business Review, October 2005
Pfeffer, Jeffrey; Robert Sutton; The Knowing-doing Gap, Harvard Business School Press, USA, 2000
Pieroni, W.; ‘IT and Shareholder Return in the Insurance Industry’, Best Review, 2002
Ross, J.; C. Beath; ‘Beyond the Business Case: Strategic IT Investment’, Sloan CISR, October 2001
Ross, J.; P. Weill; ‘Six Decisions Your IT People Shouldn’t Make’, Harvard Business Review, November 2002
SIM International Working Group, ‘Managing the IT Investment Portfolio’, October 2001
Standards Australia, ‘Corporate Governance of Information and Communication Technology’, AS 8015-2005
Telecommunications Industry Association (TIA), http://www.tiaonline.org
Thorp, J.; ‘The Challenge of Change’, The CFO Project, MRI Research, 2003
Thorp, J.; The Information Paradox—Realizing the Business Benefits of Information Technology, Revised Edition, McGraw-Hill, Canada, 2003
© 2 0 1 0 I S A C A . A l l R I g h t S R e S e R v e d .60
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RefeRenCeS (cont.)Tiernan, C.; J. Peppard; ‘Information Technology: Of Value or a Vulture?’, European Management Journal, vol. 22, no. 6, December 2004, p. 609-623
US General Accounting Office, ‘ITIM: A Framework for Assessing and Improving Process Maturity’, 2004
Van Grembergen, Wim; Steven De Haes; ‘Enterprise Governance of IT: Achieving Strategic Alignment and Value’, Springer, 2009, Belgium
Ward, John; ‘Delivering Value From Information Systems and Technology Investments: Learning From Success’, Forum (monthly newsletter of Cranfield School of Management, UK), August 2006
Weill, P.; J.W. Ross; IT Governance: How Top Performers Manage IT Decision Rights for Superior Results, Harvard Business School Press, USA, 2004
Williams, P.; ‘Optimising Returns From IT-related Business Investments’, Information Systems Control Journal, vol. 5, 2005
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isaCa professional GuidanCe puBliCaTions
ISACA pRofeSSIonAl guIdAnCe publICAtIonS
Many ISACA publications contain detailed assessment questionnaires and work programmes that provide valuable guidance. Please visit www.isaca.org/bookstore or e-mail [email protected] for more information.
Frameworks• CoBiT® 4.1, 2007• Enterprise Value: Governance of IT Investments: The Val IT™ Framework 2.0, 2008• ITAF™: A Professional Practices Framework for IT Assurance, 2008• The Risk IT Framework, 2009
CoBiT-related Publications• Aligning CobiT® 4.1, ITIL V3® and ISO/IEC 27002 for Business Benefit, 2008• Building the Business Case for CobiT® and Val IT™: Executive Briefing, 2009• CobiT® and Application Controls, 2009• CobiT® Control Practices: Guidance to Achieve Control Objectives for Successful IT Governance, 2nd Edition, 2007• CobiT® Mapping: Mapping of CMMI® for Development V1.2 With CobiT® 4.0, 2007• CobiT® Mapping: Mapping of ISO/IEC 17799:2000 With CobiT®, 2nd Edition, 2006• CobiT® Mapping: Mapping of ISO/IEC 17799:2005 With CobiT® 4.0, 2006• CobiT® Mapping: Mapping of ITIL With CobiT® 4.0, 2007• CobiT® Mapping: Mapping of ITIL V3 With CobiT® 4.1, 2008• CobiT® Mapping: Mapping of NIST SP800-53 With CobiT® 4.1, 2007• CobiT® Mapping: Mapping of PMBOK With CobiT® 4.0, 2006 • CobiT® Mapping: Mapping of SEI’s CMM for Software With CobiT® 4.0, 2006• CobiT® Mapping: Mapping of TOGAF 8.1 With CobiT® 4.0, 2007• CobiT® Mapping: Overview of International IT Guidance, 2nd Edition, 2006• CobiT® QuickstartTM, 2nd Edition, 2007• CobiT® Security BaselineTM, 2nd Edition, 2007• CobiT® User Guide for Service Managers, 2009• Implementing and Continually Improving IT Governance, 2009• IT Assurance Guide: Using CobiT®, 2007
Risk IT-related Publication• The Risk IT Practitioner Guide, 2009
Val IT-related Publications• Enterprise Value: Getting Started With Value Management, 2008• The Business Case Guide: Using Val ITTM 2.0, 2010• Value Management Guidance for Assurance Professionals: Using Val ITTM 2.0, 2010
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Executive and Management Guidance• An Executive View of IT Governance, 2008• An Introduction to the Business Model for Information Security, 2009• Board Briefing on IT Governance, 2nd Edition, 2003• Defining Information Security Management Position Requirements: Guidance for Executives and Managers, 2008• Identifying and Aligning Business Goals and IT Goals: Full Research Report, 2008• Information Security Governance: Guidance for Boards of Directors and Executive Management, 2nd Edition, 2006• Information Security Governance: Guidance for Information Security Managers, 2008• Information Security Governance—Top Actions for Security Managers, 2005• ITGI Enables ISO/IEC 38500:2008 Adoption, 2009• IT Governance and Process Maturity, 2008• IT Governance Domain Practices and Competencies: – Governance of Outsourcing, 2005 – Information Risks: Whose Business Are They?, 2005 – IT Alignment: Who Is in Charge?, 2005 – Measuring and Demonstrating the Value of IT, 2005 – Optimising Value Creation From IT Investments, 2005• IT Governance Roundtables: – Defining IT Governance, 2008 – IT Staffing Challenges, 2008 – Unlocking Value, 2009 – Value Delivery, 2008• Managing Information Integrity: Security, Control and Audit Issues, 2004• Understanding How Business Goals Drive IT Goals, 2008• Unlocking Value: An Executive Primer on the Critical Role of IT Governance, 2008
Practitioner Guidance• Audit/Assurance Programs: – Change Management Audit/Assurance Program, 2009 – Generic Application Audit/Assurance Program, 2009 – Identity Management Audit/Assurance Program, 2009 – IT Continuity Planning Audit/Assurance Program, 2009 – Network Perimeter Security Audit/Assurance Program, 2009 – Outsourced IT Environments Audit/Assurance Program, 2009 – Security, Audit and Control Features Oracle® Database, 3rd Edition, Audit Program and ICQ, 2009 – Security, Audit and Control Features SAP®ERP, 3rd Edition, Audit Programs and ICQs, 2009 – Security Incident Management Audit/Assurance Program, 2009 – Systems Development and Project Management Audit/Assurance Program, 2009 – UNIX/LINUX Operating System Security Audit/Assurance Program, 2009 – z/OS Security Audit/Assurance Program, 2009• Cybercrime: Incident Response and Digital Forensics, 2005• Enterprise Identity Management: Managing Secure and Controllable Access in the Extended Enterprise Environment, 2004• Information Security Career Progression Survey Results, 2008• Information Security Harmonisation—Classification of Global Guidance, 2005• IT Control Objectives for Basel II, 2007
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Practitioner Guidance (cont.)• IT Control Objectives for Sarbanes-Oxley: The Role of IT in the Design and Implementation of Internal Control Over
Financial Reporting, 2nd Edition, 2006• OS/390—z/OS: Security, Control and Audit Features, 2003• Peer-to-peer Networking Security and Control, 2003• Security Awareness: Best Practices to Serve Your Enterprise, 2005• Security Critical Issues, 2005• Security Provisioning: Managing Access in Extended Enterprises, 2002• Stepping Through the IS Audit, 2nd Edition, 2004• Stepping Through the InfoSec Program, 2007• Technical and Risk Management Reference Series: – Security, Audit and Control Features Oracle® Database, 3rd Edition, 2009 – Security, Audit and Control Features Oracle® E-Business Suite, 3rd Edition, 2010 – Security, Audit and Control Features PeopleSoft, 2nd Edition, 2006 – Security, Audit and Control Features SAP®ERP, 3rd Edition, 2009• Top Business/Technology Survey Results, 2008