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FINAL
Version 1.0
REVISION HISTORY
Date 9/1/07 1/3/08 1/22/08 Description Created Circulated to IT Coordinators for comments incorporated comments received and conducted editorial revisions Approved by CIO, R. John Willmott Version DRAFT 1.0 DRAFT 2.0 FINAL 1.0
Table of Contents
TABLE OF CONTENTS..............................................................................................................................................3 INTRODUCTION.........................................................................................................................................................4 1.0 COVER PAGE........................................................................................................................................................6 2.0 EXECUTIVE SUMMARY.....................................................................................................................................6 3.0 BUSINESS PROBLEM/NEED(S).........................................................................................................................8 4.0 BUSINESS OBJECTIVE(S)..................................................................................................................................9 5.0 CURRENT STATE...............................................................................................................................................10 6.0 ALTERNATIVES.................................................................................................................................................12 7.0 PROPOSED SOLUTION.....................................................................................................................................13 8.0 PROJECT SCHEDULE & RESOURCE REQUIREMENTS..........................................................................17 9.0 COST-BENEFIT ANALYSIS..............................................................................................................................20 10.0 RISK ASSESSMENT.........................................................................................................................................26 11.0 REVIEW AND APPROVAL ............................................................................................................................27
Introduction
The Project Management Office (PMO) within the Office of Technology and Information Services (OTIS) has developed this business case template to assist DEP programs in analyzing and documenting the business justification for an information technology (IT) project. The purpose of a business case is to systematically examine alternative solutions to a stated business problem, need or opportunity. A rigorous business case analysis provides the necessary elements to support managers in selecting and prioritizing those IT projects that should be approved and funded. The business case is a single document that contains the business, financial and technical information required to provide a thorough justification for a project. The project sponsor and the respective business area, not IT, own the business case. The business case provides a comprehensive view of the proposed project and provides financial justification for that project. It makes the case for change and tells the story of the project in non-technical, easy-tounderstand language. The business case should be a compelling justification for the project. As such, it must clearly detail the business need and objectives, expected benefits versus the costs, an alternatives analysis of other potential solutions and an overall risk analysis. A business case always focuses on the non-technical reason for conducting a project. While there may be a technical solution that is proposed to solve the business need or problem, the business case must justify that there is a clear business need or problem being addressed and that any technical solution proposed will result in a defined business improvement. The business case contains the following elements: Cover Page Executive Summary Business Problem/Need Business Objective(s) Current State Alternatives Proposed Solution Scope Project Phases & Milestones Work Breakdown Structure (WBS) Business & Operational Impacts Project Schedule and Resource Requirements Cost-Benefit Analysis Risk Assessment Review and Approval Process
Using the business case document, the reader should be able to understand what the project is about, the role of the project in the departments business and strategic plans and the business justification for the project. The reader should also understand how the project improves the overall efficiency and effectiveness of the Department and/or state government as a whole. Once completed, the business case analysis should contain all of the information to assist management in evaluating and, if appropriate, approving the proposed project. The remainder of this document is to be used as a template for any DEP business cases for IT projects. Each section contains instructions (in blue text) and guidelines in brackets []. When developing your business case, be sure to remove the bracketed instructions text and replace with the text pertaining to your specific business case. The DEP business case template is scalable to the nature and impact of the proposed project. The number of pages of any specific business case will vary, depending on the subject matter of the case. It may be a brief 2-4 page document or an extensive evaluation consisting of 20 to100 pages. However, the length of the business case should be kept to a minimum, ensuring it stays on topic, presents relevant information in a clear and concise manner, and is focused on supporting management in making decisions. The time and effort spent on a business case should be in proportion to the scope of the problem. A general rule of thumb is that a business case should take approximately 5-10% of the expected actual project time. For example: 25 day project to implement the business opportunity = 2 days to put together a complete but straightforward and simple business case 3 month project to implement the business opportunity = 9 days to put together an appropriately detailed business case 1 year project to implement the business opportunity = 1 1.5 months to put together a detailed business case 3 year project to implement the business opportunity = 3 months to put together a comprehensive business case As an option, you may use the Schedule IV-B Feasibility Study methodology in place of this DEP business case methodology. The Schedule IV-B Feasibility Study templates were simplified and adapted to form the basis of the DEP business case templates herein, so they may be used as an acceptable substitute. You can download the Feasibility Study documents at http://trw.state.fl.us/iv-b_downloads.cfm.
The Executive Summary should stand alone as the single source of the overall project objectives, goals, proposed actions, cost/benefits, risks and success criteria. It should assist an executive-level sponsor in assessing the value of the project and provide a reasonable expectation of a successful implementation. The Executive Summary Section should be brief enough to give a full understanding of the business case supporting the proposed project, including all relevant facts and key issues, and should be clear, understandable and precise. Although the Executive Summary appears at the beginning of a business case, it should be written last, once you have all of the additional pieces below arranged.
If there is a legislative mandate associated with the project, note this, but it does not obviate the need to describe the underlying business need or problem. ]
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6.0 Alternatives
[Describe the alternatives that are available to address the problem or need and meet the stated business objectives. Always include the alternative to do nothing (i.e., maintain status quo) as a valid option. Clearly identify the pros and cons of each alternative and why the selected solution (that is, the proposed project) was selected. Define each alternative in sufficient detail to enable identification of specific impacts (Business & Operational Impacts), project risks, and benefit versus costs. Include any detailed requirements analysis in an appendix.]
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2.
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Figure 2: WBS for a Typical Software Development Project, with Some Branches Fully Decomposed
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3.
Business & Operational Impacts Provide a list of all business and operational impacts for the technology infrastructure, staff and business processes affected by the project. Describe the anticipated changes that would result from implementation of the future process (the project). Do not consider cost at this point. Impacts include (but not necessarily limited to): Required hardware Required software (off-the-shelf or developed) Other required technology Infrastructure Databases Communications capabilities Personnel changes (Hiring, Re-training, Re-alignment, Staff Reduction) Recurring operations and support requirements Change in service and/or products being provided]
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you will gather more detailed information to form the basis of a solid business case. ]
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Estimated Duration
3 weeks 7 weeks 3 weeks 10 weeks
15 weeks 4 weeks
4 weeks 3 weeks
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DIRECT AND INTUITIVE BENEFITS Faster business transactions Increased access to information Increased data integration across applications More effectively integrated systems Ease of support Reduce manual effort Reduce data entry Reduce paper process Avoid hiring more staff Reduce discrepancies Reduce claims and adjustments Reduce data entry Reduce manual effort Reduce data entry errors Reduce paper process
INDIRECT AND STRATEGIC BENEFITS Stronger relationship with customer/citizens Enhanced responsiveness Better service Enhanced agency reputation Increased system availability More satisfied end-users Faster, more effective customer support Lower burden on mailroom Reduced process steps facilitate faster processing of information Process improvements in reconciliation of invoice, purchase order and remittance Reduced phone time/ improved efficiency Reduce redundancy Streamlined time to process information Accomplish more without additional hires
Finance
Administrativ e
Ultimately, the decision to proceed with a project may hinge on demonstrable evidence that the benefits of the project will outweigh the costs. Therefore, focus your attention on tangible benefits as opposed to intangible benefits. Consider the following: When the benefit will be realized Who will realize the benefit How will the benefit realization be measured and/or assessed Uncertainty in the cost savings estimates for tangible benefits
3. Document the expected Tangible and Intangible Benefits in a Benefits Realization Table:
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Benefit
Intangible ?
s the benefit ?
benefit realized ?
assessed/measure d?
1 2 3 4 5
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a. Briefly describe each benefit that is expected from implementing the proposed project. Indicate whether the expected benefit is tangible or intangible. A tangible benefit results in a business change with quantifiable financial value, such as: i. New or increased revenues ii. New or increased reimbursements (grants, federal financial participation) iii. Cost reductions iv. Personnel cost reductions b. Intangible benefits are positive business outcomes that do not have a clear financial measure. Some examples of intangible benefits include: i. Strategic fit between the projects technology and the agencys technology standards ii. Increased data availability enabling more informed decision-making iii. Increased flexibility by allowing several people to perform a task rather than one person iv. Reductions in backlogs or workloads that will not result in program staffing or cost changes v. Complying with statute or rule (may be tangible or intangible) vi. Improving current or enabling new customer services c. Identify the recipient(s) of the benefit. d. Briefly describe any actions or processes that are necessary for the recipient to receive the benefit (e.g., a short statement of how the benefit will be realized). e. Briefly describe how the program will assess or measure when and how benefits are realized within the intended program(s). f. Enter the proposed date (month and year) that the benefits are to be realized. For multi-year projects, there may be recurring benefits that need to be identified on multiple lines by year in the Benefits Realization Table or with multiple dates in the benefits realization date column.
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The identified Tangible Benefits are used in the subsequent CostBenefit Analysis to show the proposed projects return on investment to the program, agency and/or State. 4. Document the expected project costs and the tangible benefits in the Cost-Benefit Analysis Calculation Forms. Refer to the CostBenefit Analysis Toolkit (Excel Workbook) for detailed instructions on how to complete these forms. 5. Address the costs or impacts to the program area if the project is not done. If needed, you may use the full Schedule IV B CostBenefit Analysis workbook provided by the Florida Technology Review Work Group at http://trw.state.fl.us.]
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Project Sponsor:
Signature: Date:
Division/Office Director:
Signature: Date:
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