Business Case Report

Business Case ReportHigh Technology ProjectVirtual Reality ModuleMonth 01 Year 2000 Copyright 2002 MOBIPROThis document is protected by European copyright law and the law of confidentiality and the comparable laws of other countries. It contains valuable information proprietary to MOBIPRO. No part of this material may be copied, stored or transmitted in any form, electronic or otherwise, without the prior written consent of MOBIPRO.High Technology ProjectVirtual Reality ModuleBusiness Case Report62a0fbf7aa85a9a3f47931bf2b35ac69.pdfPage iTable of Contents0.NOTES TO AUTHOR. 10.1Introduction. 10.2Tailoring the Template. 10.3General Hints. 11.OVERVIEW. 21.1Purpose. 21.2Related Documentation . 31.3Related Phases . 32.EXECUTIVE SUMMARY . 32.1Background . 32.2Needs Summary. 32.3Proposition Summary . 32.4Options Evaluated . 32.5Method of Evaluation. 42.6The Recommended System Acquisition/Development . 52.7Delivery . 52.8Potential Risks. 52.9Impact of not Proceeding. 52.10Next Action. 52.11References/Appendices. 63.BUSINESS OVERVIEW . 63.1Background . 63.2Need Statement. 63.3Need Justification . 63.4References/Appendices. 64.OBJECTIVES & PARAMETERS.64.1Proposal Description. 64.2Objectives To Be Achieved. 64.3Target Markets . 74.4Constraints . 74.4.1Costs.74.4.2Timeframe.74.4.3Investment.74.4.4Standards.74.4.5Other.8High Technology ProjectVirtual Reality ModuleBusiness Case Report62a0fbf7aa85a9a3f47931bf2b35ac69.pdfPage ii4.5Infrastructure Investment Required. 84.6Class of Investment Project. 85.SCOPE OF PROPOSAL. 95.1Scope Inclusions . 95.2Scope Exclusions . 95.3Assumptions & Provisos. 96.ALTERNATIVES. 96.1Option 1 Do Nothing. 96.1.1Overview.96.1.2Approach.96.1.3Pros & Cons.96.1.4Risks .106.1.5Costs.106.1.6Benefits.116.1.7Strategy Fit.127.ALTERNATIVES. 127.1Option 2 - Develop a new system. 127.1.1Overview.127.1.2Approach.137.1.3Pros & Cons.137.1.4Risks .137.1.5Costs.137.1.6Benefits.157.1.7Strategy Fit.168.COSTS SUMMARY . 168.1General Costs. 168.2Implementation Costs. 188.3Total Annual Operating Costs. 188.4Change Management Costs . 188.5Other Costs . 188.6Investment Appraisal . 199.BENEFITS SUMMARY . 199.1Benefits Sought & Achieved or not Achieved. 199.2Benefits Applicable. 1910. RISKS SUMMARY. 1910.1Traditional Risks . 1910.2Extended Risks. 2011. RECOMMENDATION . 21High Technology ProjectVirtual Reality ModuleBusiness Case Report62a0fbf7aa85a9a3f47931bf2b35ac69.pdfPage iii12. NEXT STEPS. 2113. APPENDICES. 2113.1Appendix A, Customisation . 2113.1.1Additional Mandatory Features.2213.1.2Additional Desirable Features.2213.2Appendix B - Cost Benefit Analysis Worksheet. . 2313.3Appendix C - Cost Sub Report. 2313.4Appendix D - Benefit Sub Report . 2313.5Appendix E - Risk Sub Report. 2313.6Appendix F - Strategy Match Sub Report. 2313.7Appendix G Change Management Strategy. 2313.8Appendix H: Overview Of Phases . 2313.9Appendices . 26High Technology ProjectVirtual Reality ModuleBusiness Case Report62a0fbf7aa85a9a3f47931bf2b35ac69.pdfPage 10. Notes to Author0.1 IntroductionThis skeleton Business Analysis Report contains Notes to the Reader in italics in each section. This information is not normally included in the final Business Analysis Report and is intended only to provide assistance to the team creating a Business Analysis Report.These notes describe the intended content and scope of the section. In addition, each section contains information about which team members usually write the section. This is based on past experience and is not intended as a firm rule, merely a guideline. Each team should decide how each section should be completed and by whom.Additional information may be required to accommodate the specific needs of a project. Likewise, information may not be relevant to the specific needs of a project and should be omitted. Each team should address this early in the creation of a Business Analysis Report.0.2 Tailoring the TemplateSearch for the following information and make the changes which are appropriate to your specific situation. Each of these has been used consistently within this document.Company Name: MOBIPROProject Name: High Technology ProjectModule Name: Virtual Reality ModuleThe usage of a company name in this report has been deliberately minimised because we consider this to be a security issue.0.3 General HintsInclude (in appendices) any relevant information that helps clarify the case. Ensure the report is realistic, factual, useful and above all understandable. Apply the “So What?” and “Is This Us?” tests. If it fails the test, then drop it.Avoid any and all jargon, and explain any necessary terminology.It is important to have a clear path forward so that the business case is not put into the too hard basket. Make sure that there is reference to what will happen next. For example, the audience may have a week to look at the report before a meeting to decide if the recommended option is accepted.High Technology ProjectVirtual Reality ModuleBusiness Case Report62a0fbf7aa85a9a3f47931bf2b35ac69.pdfPage 2Unless there is major padding in the costing, it is likely the budget need to rise over time. Common sense tells us that there will be things unknown at this point in time, which will become apparent in the future and cost additional money. Unless there is a contingency in the budget, there is no facility to pay for the unknown.If approval of the business case is a major exercise in the organisation, it may be useful to gain agreement that there will be no further submissions unless the budget is exceeded by x%. If costs do exceed x%, there will be a supplementary submission. It is important the approving body realizes the costs are based on what you know at this point in time.Another approach is to have a contingency fund which is approved by the board, and on which the project team reports expenditure separately to the board.References & GuidesBefore commencing the process, the Sub Reports should be completed. These will provide the foundation for the Business Case Report. The Sub Reports are the explanation behind the calculation of details. The Sub Reports are used as a prompt to ensure ALL the information required is discovered, and documented.There will be overlap in the Sub Reports and this is to be expected. For example, achievement of a Strategic Objective may also be a benefit. Use your own discretion as to how it should be included in the Business Case Report. Do not slavishly transfer information from the Sub Reports. Distil the details.One failure of major projects is that managing the expectations of the users is neglected because there is no money. Nobody thinks about it until after the budget is approved. It is important to have completed a change management strategy and built the costing into the business case.1. OverviewJustifying an investment in technology requires a rational business case. That case takes organisational benefits into account without ignoring costs, benefits, return on investment and risk. Strategic and other benefits need be balanced against cost and risk. All proposals furthermore have alternatives, including inaction or do nothing. An assessment of alternative options helps the business better understand the relative value of a proposal and whether to support it. The Business Case Report then - Scans the range of business system options availableExamines their advantages and disadvantages, both financial and non-financialEstimates the Costs, Benefits Risks and Strategic Match of each optionRecommends a relative best option or the do nothing option1.1 PurposeThe Business Case Report serves to -Clarify, size and choose between competing business system options.Quantify the cost and benefits of each option.High Technology ProjectVirtual Reality ModuleBusiness Case Report62a0fbf7aa85a9a3f47931bf2b35ac69.pdfPage 3Present a clear review of the options and recommend a course of action. 1.2 Related DocumentationBusiness Case - Benefits Sub ReportBusiness Case - Risks Sub ReportBusiness Case - Costs Sub ReportBusiness Case - Strategic Match Sub ReportBusiness Case - Cost - Benefit WorksheetKey Memos1.3 Related PhasesBusiness Analysis phase2. Executive SummaryThis section in 3 pages maximum is a precise of the report, major recommendations and benefits. This information is usually written by the whole team.Include the following paragraphs in brief, precise style -2.1 Background A short description of the project historyExample :“The project was initiated in June last year at the request of the Board. The driving force was the need to cope with Year 2000.”2.2 Needs Summary What are the “needs” that are driving the project. eg a need to comply with legislation; a need to match competitors.Example :“There are two major needs behind the project to move office:Proposed seminars require larger training roomStaff growth cannot be accommodated in current office premises”2.3 Proposition SummaryBrief details of the requirements for the system. eg Objectives, scope, timeframes, investment, standards etc.Example :The requirements of the system are Close to public transportClient ServerMust be able to issue invoices.Has ADSL availableMust link to our existing financial package.etc”High Technology ProjectVirtual Reality ModuleBusiness Case Report62a0fbf7aa85a9a3f47931bf2b35ac69.pdfPage 42.4 Options Evaluated A few lines to outline the options that were examined. If options were not evaluated for any reason, explain why they were excluded.Example“The team looked at two scenarios varying the scope, resources, cost and time.1.Development using SofwareDeveloper and 5 developers2.Development using SofwareDeveloper and 8 developersScenarios 1 & 2 will ensure the transfer of SoftwareDeveloper skills, as well as delivery of the system. Scenario 2 shows there is little benefit to adding extra developers.A comparison of the two scenarios is shown in the following table:ScenarioScopeDevelopersTime (elapsed)Cost1Module 1 (2200 FP)523 weeks287.5K Module 2 (2500 FP)520 weeks250KTotals4700 FP543 weeks537.5K2Module 1 (2800 FP) 820 weeks400KModule 2 (3200 FP)815 weeks300KTotals6000 FP835 weeks700KBoth scenarios include the use of SoftwareDeveloper. Using SoftwareDeveloper for the development ensures SoftwareDeveloper of quality systems in an incremental manner to fixed timeframes. SoftwareDeveloper incorporates changes rather than fighting it and because SoftwareDeveloper is business driven, business will get what it needs at time of delivery. The SoftwareDeveloper deliverables are also well engineered to satisfy the technical requirements of IT. The SoftwareDeveloper blends the three components of software development, People/Process/Technology via a framework of techniques to integrate management, business users and IT as partners. It manages the process of applications development by using common sense, incorporating change (instead of fighting it), manage expectations through training, provides a transfer of skills and focuses on quality (doing the right thing in the fastest possible time). Quality, from the users perspective, is ensuring that the business users get what they need at time of delivery and from the IT perspective, is ensuring that the deliverables are well engineered.”2.5 Method of Evaluation Outline by whom and how the evaluation was carried out.Example :High Technology ProjectVirtual Reality ModuleBusiness Case Report62a0fbf7aa85a9a3f47931bf2b35ac69.pdfPage 5“The evaluation was carried out by a team consisting of the following people during June and July this year.John Smith - IT Manageretc”2.6 The Recommended System Acquisition/Development Document the recommendation and give a brief outline of the key issues. eg Description, how it fits with Business/IT Plans, costs, benefitsExample :“After looking at packages available, we recommend in house development for the following reasons.No package has more than a 60% fit with our requirementsFour of the five packages do not have a client server version.The fifth consists of the LAN based version with a screen scraperetc.”2.7 DeliveryProvide details of the proposed delivery schedule if they are available.Example:“The Modules will be delivered in the following order:1.Virtual Reality2.RealityThe plan involves incremental delivery of the above Modules to reduce risk and to obtain business benefit as early as possible.”2.8 Potential RisksThese can be picked up from the Risk Sub ReportExample :“The following are the main risks.Lack of expertise in VB.Business requirements are vague.etc.”2.9 Impact of not ProceedingWhat happens if we do nothing.Example :“Unless we move now, we will not be able to guarantee the system will be modified before the year 2000”2.10Next ActionThe path forward. Example :High Technology ProjectVirtual Reality ModuleBusiness Case Report62a0fbf7aa85a9a3f47931bf2b35ac69.pdfPage 6 “A meeting will be held next week to discuss the options and agree the development proposal”2.11References/Appendiceseg Sources, Timetable and Resources3. Business OverviewThis section in 2 pages maximum expands the information contained in the Executive Summary.Include the following points -3.1 Background Example :In 1996, we first looked at modifying the existing system to cope with new products proposed for 1999. The result was a report included as Appendix C which recommended.”3.2 Need Statement Briefly, what is the need being addressed in the Report.Example : “We need to replace the aging Wang system with a Windows based System.”3.3 Need JustificationOutline the justification for the need.Example : “ The Wang hardware, on which the current system runs, is being phased out as a matter of corporate policy. The data maintained by the existing, aging system no longer adequately meets current business needs. None of the modules of the system are integrated which, in many instances, necessitates duplicate data entry. Aspects of the system handled manually are no longer manageable for current and growing staff levels.”3.4 References/Appendiceseg Business Plans, Surveys, Costs, Technical Environment, etcetera4. Objectives & Parameters4.1 Proposal DescriptionSummarise the proposal, for example, as follows-Example : “ To evaluate, select and acquire an efficient, integrated and modular enterprise management system that addresses the needs today of the finance, purchasing, payroll, human resources and engineering business areas, and that incorporates current best practices in these areas. Such a system will preferably be a single package-single vendor solution. Options such as package use as is, package use with customisation, and in-house development in part will be considered. The case of inaction or do nothing will also be considered.” 4.2 Objectives To Be AchievedState the goals to be achieved clearly.High Technology ProjectVirtual Reality ModuleBusiness Case Report62a0fbf7aa85a9a3f47931bf2b35ac69.pdfPage 7Example : “ The primary objective is to satisfy ad-hoc queries, add new data and deliver valued-added information services to clients in a much shorter time frame than is currently the case. The secondary objectives are (list) .”4.3 Target Markets List target markets where market entry is enabled or market share is expanded by this proposal.Example : “The new functionality will enable the package to be used in New Zealand as we will now be able to handle GST.”4.4 ConstraintsState the limits on the proposal clearly.Example : “As we have a major project underway which will take 18 months to complete, we will not have experienced development staff available internally.”4.4.1 CostsState the budgetary limits that apply. eg Initial, annual or total cost limits. Example :“The budget allocated is $1m with a payback period that must not exceed 2 years.”4.4.2 TimeframeState the time limits that apply.Example : “Implementation of core systems on or before 1997 financial yearimplementation in full by latest 1998 March quarter. “4.4.3 InvestmentState any investment criteria that apply, for example-Example : “Maximum payback period of three yearsMinimum internal rate of return of 15%.”4.4.4 StandardsState any business or technical standards where conformity is required - Example : “Financial systems conform to Australian G.A.A.P. practicesAccounting packages conform to NSW Government G.S.A.S. recommendationsTechnical platform conform to corporate IT &T standards (list) . “4.4.5 OtherState any other constraints that apply, for example-High Technology ProjectVirtual Reality ModuleBusiness Case Report62a0fbf7aa85a9a3f47931bf2b35ac69.pdfPage 8Example : “No protracted run-off of legacy systems beyond two months duration.Policy is to implement packaged solutions rather than to develop systems.”4.5 Infrastructure Investment RequiredSummarise the size of any prerequisite investment required.Example : “A high initial investment in data, software, hardware, staff, training or management will be required to create the infrastructure needed for the project. Substantial changes in IT & T service delivery will be required in several areas. These are (list) .A medium-to-small initial investment in data, software, hardware, staff, training or management will be required to create the infrastructure needed for the project. Minor changes in IT & T service delivery will be required. These are (list) .The proposal uses existing IT & T services and facilities. No investment in infrastructure is required.”4.6 Class of Investment ProjectClassify the nature of the investment project.Example : “Must Do Investmenteg Compliance with legislation, statutes, regulations, or replacement of obsolete, costly high-risk systems. Core Business Investmenteg. Development or extension of products and services, opening of new channel of distribution like telemarketing, automation of operations.IT Infrastructure/Services Investmenteg. Upgrade of aging printers & terminals to cut maintenance costs, linking with electronic commerce networks, or consolidation of systems.Prestige Project Investmenteg. Move to prestige address, joint venture in high profile technology or support of a multi-media event. Research & Development Investmenteg. Tax-effective investment in document management systems for existing clients, the local market and exports.Othereg. Change or consolidation of offices to cut rental & manpower costs but requiring one-off refurbishment and rewiring costs.”Note that a project may have several facets eg. core business and IT infrastructure investment. Refer to pertinent sections of corporate plans and strategies.5. Scope of Proposal5.1 Scope InclusionsState clearly what is included in this proposal.High Technology ProjectVirtual Reality ModuleBusiness Case Report62a0fbf7aa85a9a3f47931bf2b35ac69.pdfPage 9Example : “The proposal includes all database changes required to avoid year 2000 problems.”5.2 Scope ExclusionsState clearly what is excluded from this proposal, adding any provisos or assumptions necessary.Example : “The implementation of automated workflow is desirable but not included initially. However, proposed systems must have the inherent capacity to provide automated workflow.”5.3 Assumptions & ProvisosList any assumptions or un-verified facts relating to the project.Example : “ The proposal is based on the assumption that we will be able to find a package that is an 80% fit with our requirements.”6. Alternatives6.1 Option 1 Do NothingIt is always a wise decision to start with the option of inaction. It will give an indication of the urgency of the situation and prompt action.6.1.1 OverviewThis option applies if no action is taken, or business case recommendations are rejected, or recommendations are accepted but action deferred.Example :“If no action is taken within the next two months it is highly likely we will be unable to comply with recent insurance industry legislation. The implications of this non-compliance are that we may have our accreditation withdrawn.”6.1.2 ApproachNormally we would talk about how the option would be implemented. As there is no action to be taken, ther