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Service Investments BUILDING A CASE

11 Feb, 2009 By: Mike Woodard imageSource

Service Investments BUILDING A CASE

Many service organizations will report that virtually every discretionary
dollar has been removed from their budgets and employee workloads are at a
breaking point.  Add to this the current economic environment and you have a
limited to non-existent appetite for any investment. At the same time, to remain
competitive in the marketplace, service organizations must look for additional
cost savings, revenue growth opportunities, and customer experience
enhancements.  Leading service organizations, having already placed their bets, 
are experiencing  real savings and operational excellence with the adoption of
technology across multiple business components.  So, let’s assume you
acknowledge the imperative of adopting technology solutions such as workforce
optimization, mobile field service, business intelligence, or knowledge
management.  While being painfully aware of a low investment appetite, how do
you make a convincing  argument  to justify the required investment?   Answer: 
Generate a formal business case.

What is a formal business case?

A formal business case is a well-structured, written document  that  enables
management to determine if a proposed project is of value to the business and to
objectively measure the achievement of the business case’s benefits. 
Information generally included in a business case is the background of the
project, expected business benefits, costs of the project, foreseen risks, and
possibly the costs and risks associated with the option of doing nothing.  From
this information, the justification for the project investment is derived.  As
an example:  let’s say you are considering implementing a “location
intelligence” solution  to optimize technician utilization through automated
scheduling and routing.  The background of the project could explain the
opportunity to move  away from 100% territory assignments enabled by a growing
installed base of low touch products with a diminished  tech/customer
relationship value proposition.  The expected business benefits could include
reduced response time (customer satisfaction), increased productive technician
time (reduced cost/ burdened rate), and reduced business miles (reduced cost). 
Costs of the project could include software purchase and maintenance, IT
support, training,  and hardware.  Foreseen risks might be employee backlash
associated with GPS use or customer dissatisfaction/defection as a result of
losing assigned technician.  There could be financial risks which need to be
disclosed.  Finally, the option of doing nothing could include a lost
opportunity to offset increasing  fuel costs or risk of losing competitive

A business case should contain:

  • Reference – Project name, background, and current state.
  • Context – Business objectives/opportunities and business strategic
  • Value Proposition – Desired business outcomes, outcomes roadmap, business
    benefits by outcome,   quantified benefits, costs/ROI financial
    scenario, risks/costs of not proceeding, and overall project risks.
  • Focus – Problem/solution scope, assumptions/constraints, options
    identified/evaluated, size, scale and complexity assessment.
  • Deliverables – Outcomes, deliverables and benefits planned, organizational
    areas impacted, key stakeholders & dependencies.
  • Workload – Approach, phase/stage definitions, project change activities,
    technical delivery activities, workload estimate/breakdown, project plan and
  • Required resources –  Funding, a project leadership team, team  resources,
    project overnance/steering team.
  • Commitments (required) – Project controls, reporting processes,
    deliverable schedule, and financial budget/schedule.

Key Point |  Business case generation should not be viewed as a
mechanical exercise.  Indeed, the case must demonstrate that issues have been
thought through, the benefits are realistic and attainable, any technical
aspects have been thoroughly evaluated and costed, and outcomes will be tracked
and evaluated to determine success.

Before actually building your business case, it’s a good idea to do some
“pre-work” to simplify the process and to ensure success:

  • Engage your finance function early on.  Let them know what you’re
    considering and why.  Solicit their help in developing the financial portion
    of the business case.  Technology investments can involve multiple expenditure
    options requiring informed financial decisions.
  • Make your IT department  your best friend.  Obviously with almost
    any technology solution implementation, the IT department is a key
    stakeholder.  The business function owner, in this case service, and the IT
    function leader must agree on the merit of the proposal before submitting it
    to senior management for approval.
  • Identify all business stakeholders.  Complete a preliminary process
    flowchart which identifies all touch points, internal and external, relative
    to your proposal, including project planning, implementation, and go-live.
  • Brainstorm potential benefits & savings.  Engage stakeholders in a
    brainstorming session to identify benefits and savings relative to the
    proposed project - sort by business function -  categorize by hard and soft
    savings - stack rank by amount of savings.
  • No need to reinvent the wheel.  Many solution vendors provide
    business case templates, at least the financial portion,  that can be adapted
    to your particular situation.  Also, industry consultants can be of tremendous
    value in helping to build a compelling business case.

Key Point | A business case, once developed and approved, becomes the
key component of a project charter which outlines all aspects of a business
initiative or project.  A sound business case is the foundation of any project
charter.  So, if you’ve completed your business case or possibly have one in
place,  here is a  simple checklist to assess the quality of your process:

  • Adaptable – can be tailored to the size and risk of the project.
  • Business oriented – concerned with the business capabilities and impact,
    rather than a technical focus.
  • Comprehensive – includes all factors relevant to a complete evaluation.
  • Understandable – contents are relevant, logical, simple to complete, and
  • Measurable – all key aspects can be quantified, tracked, and measured to
    determine achievement.
  • Accountable – clear accountabilities and commitments for the delivery of
    benefits and management of costs.

Mike Woodard, Consultant, Strategy Development, a technology and
outsourcing industry management consulting firm. He is a speaker at ITEX’09 in
March in Las Vegas.  At

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