Business Case
It's no longer acceptable to justify an investment in IT based
on staying competitive or keeping pace with technology advancements.
There must be a business case. Unfortunately, there is a lot of
confusion about what makes a good business case.
Defintion
A business case is a tool that supports planning and decision-making
for both operational and investment decisions. A good business case
includes the methods and rationale that were used to quantify benefits
and costs. It shows expected profit impact and/or cash flow consequences
over a period of time.
Need for Independence
One of the big problems with business cases is that they are written
by the same people who want to be funded for a particular project.
These people have a vested interest and typically find a way to
make their case with numbers. It gets worse when organizations rely
on vendors to help them with their business case. The vendors may
have some slick material and may be able to offer a few ideas for
people who don't have a clue, but caveat emptor.
Methodology
- Estimate approximate Total Cost of Ownership (TCO)
- Estimate approximate benefits
- Prepare a 5 year cash flow that includes a Return on Investment
(ROI) calculation
- Recommend a plan of action
For more information, call Michael Burns at 416-485-2200 or contact
us.
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