How to develop a business case for an IT consumerization project
The job of IT is to create economic value. So it should not be surprising that developing a business case based on sound rationale is an essential part of any major consumerization project.
Typically we see two business cases developed during the life of a consumerization project. Right at the start you need a high level business case to justify the pilot.
This has to be high level for two reasons. First, at the beginning you don’t have detailed data with which to make specific claims, especially around cost. Second, you want to start with a focus on what the business really wants – such as profits, growth, or innovation.
The trouble is that there are multiple determinants of profits, growth and innovation. As the table above shows, there is no simple linkage between what IT does and business outcomes, and it can be hard to show what fraction is due to your project.
We see six sources of value that the business wants, and financial value is just one of them. However, a good statement of the financial value will help build support for a project.
The second business case is based on the data captured during the pilot. This means that your pilot needs to include a data capture protocol to ensure quality data for the second business case. A goal for an energy company that we interviewed is that the high level business case is accurate to plus or minus 30%, and the detailed business case is accurate to plus or minus 10%.
The chart below shows the general approach a consumer packaged goods firm used. Groups within the pilot were reviewed monthly on a variety of criteria including the successful use of web tools. The business activities of the participants, their experiences, their results, and their next steps were also tracked. They found it was necessary to define success differently for different segments of the population – as will often be the case, one size did not fit all.
The same organization used templates like the one shown in the next figure to collect data for the second business case. These templates ensured they collected a complete set of survey data, and made it easier for them to follow up new possibilities the test group found.
Pilots regularly turn up new sources of value that could not have been imagined beforehand. For example, an aerospace firm piloted mobile communications in a number of activities that they thought would benefit. During the pilot they discovered an unforeseen opportunity with potential for immediate payback. It turned out that the cycle time for big contracts could be significantly reduced if contracts staff could make small changes to paragraphs in the contract regardless of their location or the time of day.
We recommend that the detailed business case should be developed from the five different perspectives listed in the chart below:
It's specifically designed for technology companies.
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