MGMT 6120: BUSINESS CASE DEVELOPMENT

Gathering Data

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Phases of Business Case Development
Define the
1 Opportunity statement, objectives, and preliminary metrics. (PIP submission)
Opportunity
Identify
2 List of alternatives and elevator pitch; stakeholder list. (SL submission)
Alternatives
Elicitation and evaluation plan. General risks, assumptions, & high level plan for each
3 Gather Data alternative. (EP submission)

Analyze Multiple objective analysis using appropriate financial and non-financial

4
Alternatives measures. (MOA submission)
Make Risk and sensitivity analyses. Final summary of recommendation and associated rationale.
5 Recommendation (FREC submission)

Implementation High level project plan. Communication plan.

6
Plan (DFR submission)
Communicate the Final presentation and consolidated business case report.
7
Business Case (FR submission)
Phases of Business Case Development
Define the
1 Opportunity statement, objectives, and preliminary metrics. (PIP submission)
Opportunity
Identify List of Alternatives and Elevator pitch; Stakeholder List (SL). (SL + Alternatives
2
Alternatives submission)
Elicitation and Evaluation Plan (EP). General risks, assumptions, & high-level plan for each
3 Gather Data alternative. (EP submission)

Analyze Multiple objective analysis using appropriate financial and non-financial

4
Alternatives measures. (MOA submission)
Make Risk and sensitivity analyses. Final summary of recommendation and associated
5 rationale. (FREC submission)
Recommendation
Implementation High level project plan. Communication plan.
6
Plan (DFR submission)
Communicate Final presentation and consolidated business case report.
7
the Business Case (FR submission)
Gathering Data
Now you should have:
• A defined problem, and opportunity statement, and prioritized objectives with
preliminary metrics
• A short list of 2-3 alternatives that could – at this point – each address the problem
successfully

Next your team will:

• Conduct specific research to build the solutions that will enable each alternative to
satisfy the opportunity statement and objectives
• Create an evaluation plan with an overall timeframe for each alternative
 Data Gathering Information Gathering Plan – (IGP)

Business Analysis Program

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Gather Information, Not Requirements

Gather Information

Analyze Information

Define
Requirements

Ref: MGMT-Introduction to Business Analysis

Sources of Collecting Data

● At this stage we are NOT conducting the actual analysis of the

alternatives / solutions / options.
● We are simply identifying the VARIABLES and DATA and their
SOURCES, that will support the analysis (next phase).
Metrics vs. Variable vs. Data
What are the “Metrics > Variables > Data” in your Business Case?

Variables Data

Metrics Examples: (Can you identify the data & variables?)

1. Click-through Rate in Online sites
2. Average Revenue per Product
3. Days Sales Outstanding

Your Alternatives may also have additional variables; for example, cost of each
one of the alternatives, resources, etc.?
Collecting Data: Rationale

● The variables and data are needed to evaluate which solution is best
● Collecting data can be time consuming.
● It is important that each variable is relevant, and the mix of variables
are balanced.
● Variables will be a mix of financial and non-financial variables.
● Once the solution is implemented, use these variables to track
success of the initiative
Collecting Data: Research

There will be a lot of research during this phase.

a) Researching the actual solutions (e.g. specific software solutions or best

practices)

b) Researching the set of variables that will support the evaluation of alternatives /
soulitons, and

c) the estimates of current and future states, as deemed necessary

What Information Will You Need?

● What data is needed to compare the alternatives using the preliminary

metrics?
● Brainstorm additional metrics and data sources based on the
alternatives (Options / Ways / Course of actions / Solutions).
● You also need to indicate if baseline data exists in order to:
○ Show a trend (increase)
○ Whether new gathering / reporting of data needs to be set up as part of the
solution
○ If a target needs to be set – not for trending but to estimate the differences
between alternatives.
Collecting Data: For This Course

● For the purposes of this course, you will need to rely primarily on
information available on the internet.
● For variables where this is not possible you will need to state your
‘best educated guess’ and note that this is an “assumption”.
● Make assumptions as long as they are reasonable and document!
Collecting Data: For Your Business Case

For the purposes of the business case, you need to research or estimate
each variable’s existing value, and the value as a result of making the
change. For each variable a source needs to be indicated, for example:
o Internal systems
o Colleagues at the company
o Internet sources
o Industry benchmarking data
o Consulting firms
o Internet
o Industry experts
o Industry journals, and reports
 Documenting Estimates and Assumptions

Business Analysis Program

2015-1001 Fanshawe College Boulevard; P.O. Box 7005 London, Ontario N5Y 5R6 Phone: 519-452-4290 Fax: 519 659-9522 fanshawec.ca
Documenting Assumptions

• Whenever you are making estimates, you must document sources and assumptions
• It is not enough to simply state information as ‘fact’ – you need to justify your position
• Every piece of information should have one or the other – “Source” or “Assumption”
• It will be a good idea from the outset to spend some time delegating and planning for
this stage. How will your team organize the data?
• Time spent here will pay off later when you need to consolidate this data to analyze the
three alternatives
• It is easiest if you document as you go
• You also need to provide a rationale for each decision to use a particular variable, or
choose a particular assumption, or an estimate for a timeline
Documenting Assumptions

Example, you decide that a key variable will be employee engagement

o It is unlikely that you will have access to this data (unless you’re working in that area of
the department)

o You may assume that the company is already performing these assessments, if there
is data to support this (which would be cited in your assumption)

o However, you may determine that the company would need to create an initial
baseline by conducting an engagement questionnaire

o It is always, better to explore with other departments, if they have the information, you
are looking for through a “survey” or “questionnaire”, since, “survey” and
“questionnaire” takes, additional time, which you may not have
Documenting Assumptions
• Clearly, you cannot conduct the questionnaire itself
• You should conduct some preliminary research to determine a suitable questionnaire
(sometimes called an ‘instrument’), or even a consulting company, who could conduct
such a survey
• If it would be a specific questionnaire that gathers data from employees about a
specific problem, then create a sample questionnaire that you would use to collect the
data
• Therefore, even if you can’t collect the data you need to show HOW you would do so,
if required
• It is not enough to simply state “conduct an engagement survey”
• In the event that a situation comes up where this is simply not possible, document as
much as possible or considering changing or removing the variable
Documenting Assumptions

Therefore, even if you can’t collect the data you need to show HOW you
would do so, if required.

It is not enough to simply state “conduct an engagement survey”.

In the event that a situation comes up where this is simply not possible,
document as much as possible or considering changing or removing the
variable.
Estimates

Ref: MGMT-6124 – Methods (BABOK 10.19)

1. Bottom-up
2. Parametric Estimation
3. Rough Order of Magnitude (ROM)
4. Rolling Wave
5. Delphi
6. PERT
Estimation: Methods

• examining the components at a high level in a hierarchical

Top-down breakdown. A top-down approach is often more efficient than a
bottom-up approach.
• using the lowest-level elements of a hierarchical breakdown to
examine the work in detail and estimate the individual cost or effort,
Bottom-up and then summing across all elements to provide an overall estimate.
A bottom-up estimate is more collaborative than a top-down one.

• is a statistics-based technique. use of a calibrated parametric model

of the element attributes being estimated. For example, based on
Parametric historical data, you know it takes 30 minutes per device. You'd
Estimation multiply the 105 devices by 30 minutes to get an estimate of 3,150
minutes or 52 hours, 30 minutes
Estimation: Methods

Rough Order
• a high-level estimate, generally based on limited information, which
of Magnitude may have a very wide confidence interval.
(ROM)

• repeated estimates throughout an initiative or project, providing detailed estimates

for near-term activities (such as an iteration of the work) extrapolated for the
remainder of the initiative or project.
• For example, you expect to complete a project in eight months, but you only have
Rolling Wave clarity for the first three months. In this case, the first three months are planned. As
the project progresses and greater clarity is achieved, the following months can be
planned. It does not mean that this planning method does not exempt the project
manager from creating a list of milestones and assumptions for the project.
Estimation: Methods
Continued from prior page…

• uses a combination of expert judgment and history. There are several variations on this
process, but they all include individual estimates, sharing the estimates with experts, and
Delphi having several rounds of estimation until consensus is reached. An average of the three
estimates is used.

• each component of the estimate is given three values: (1) Optimistic value, representing the
best-case scenario, (2) Pessimistic value, representing the worst-case scenario, (3) Most
PERT Likely value.
• Then a PERT value for each estimated component is computed as a weighted average.
Sources of Information

Estimators consider available information from prior experience along with the attributes being estimated.
Some common sources of information include:

Analogous Situations
• using an element (project, initiative, risk, or other) that is like the element being estimated.

Organization History
• previous experiences of the organization with similar work. This is most helpful if the prior work was
done by the same or a similarly-skilled team and by using the same techniques.

Expert Judgment
• leveraging the knowledge of individuals about the element being estimated. Estimating often relies on
the expertise of those who have performed the work in the past, internal or external to the
organization. When using external experts, estimators take into account the relevant skills and abilities
of those doing the work being estimated.
IGP with Sequence: Example from Level 1
Generally, you will work from the top of the organizational hierarchy to the bottom

Ref: MGMT-Introduction to Business Analysis

Example

Refer to the textbook page # 25–31

Not all information from the textbook are in FOL due to copyright law
 Setting Timelines

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Creating Initial Timeframes

To do so, you need to ask:

• When could the initiative get started?
• Are there major phases to the project?
• Is there a clear end to the project where the benefits will be fully realized?

For example, with a software project, you would need to consider the time
to purchase the software, installation, configuration, training, and
implementation.
Creating Initial Timeframes

Each alternative should have an initial estimate of a timeframe for

completion. This could be a variable on its own (e.g. ‘short / medium /
long term’ implementation as part of a non-financial evaluation metric).

The timeframes will also be used to chart out the cost-benefit analysis.
Three Stages of your Timeline

Future State
IIBA Certification will
generate your income for a
Implementation certain period – e.g., 3-5
You are preparing for IIBA years
Current State
Certification, i.e., 1 year at
Problem > Opportunity
Your vision – IIBA Certification Fanshawe BA program
Usage life of your
i.e., 3-6 months for research, alternative, solution,
decision, business case service, product, or out
Implementation – how
long it will take to come after
implement with a implementation
Innovation, Change –
Business Case Development & Program or Project
Approval
Example: Timeline
Preparing for Gantt Chart
LIST of ALTERNATIVES You can use any software to create the
1. Hire aSTAKEHOLDERS’
consulting firm LIST to Gantt Chart. Copy and paste it in your
VP of Finance, Controller , CFO
develop MS Word Business Case as picture
Headand deliver
of Sales, the training
VP Sales
LIST OF
Chief Human ResourceData
VARRIABLES
needed
Officer, VPfor
HRyour metrics (example) when submitting IN PDF
2. Add two contractors to provide
the training, with the Figures
option to repeat sales typically
on the
generated by retained customers, and
hire them as permanent
Repeat sales
estimates of how many customers would
employees after a year, if
be retained in each alternatives
necessary Historical employee-satisfaction data from
Employee GANTT CHART
HR survey, plus educated guesses about
3. Try to support the new
satisfaction howtraining
employee satisfaction might change in
with the existing staffeach
(thescenario
status quo option) Typical costs of hiring and training sales
Cost of AVOID USING ACTUAL DATE
people, plus information from sales about
employee
how much revenue is lost when new sales
turnover
employee is ramping up
 Deliverables

Business Analysis Program

2015-1001 Fanshawe College Boulevard; P.O. Box 7005 London, Ontario N5Y 5R6 Phone: 519-452-4290 Fax: 519 659-9522 fanshawec.ca
Deliverables
Evaluation Plan
1. All prior submissions, incorporating stakeholders’ comments: 25%
2. List of Variables along with IGP to evaluate your three alternatives: 50%
a) include actual or estimates of the existing situation, and how the variable is expected to change based on each
alternative
b) two variables that will be required are the financial variables for overall costs and benefits
c) data points need a citation (for actual data) or a rationale for the assumption (for estimated data)
d) any data that needs to be collected also needs to include a description of ‘how’ it would be collected (e.g.,
questionnaire)
3. Gantt charts showing the estimated overall timelines and phases where appropriate, for each
alternative: 25%
a) You can use any software to create the Gantt Chart. Copy and paste it in your MS Word Business Case as picture
THEN CONVERT IN PDF when submitting
b) Avoid actual dates.

Submit the documents in the submission folder before timeline set in the Submission folder
• Write all team members’ names, company (factious) name, and the department name at the top of the page
• Use PDF format, Times Roman or Arial 12-point font size, Double spaced, apply mitigating step in case of a topic, graph, or table cut-off
• U.S. Letter size, all pages in Portrait orientation. Do not include any other page, for example, cover page, table of contents, reference, etc.
• Submitted materials may be used in class discussion. Other class participants will view and comment.