Business cases can be wonderful

Is it just me or is there anyone else out there who actually likes developing business cases? Maybe there are a few but I am sure we are outnumbered by the many who find business cases a long-winded, administrative chore. Why on earth would anyone want to get excited about this?

Well, if all you are considering are the 100s of pages of dry boilerplate and cash flow tables that are often created then you are probably right not to get excited. You should be excited about developing robust options for solving your most important problems and making well informed decisions about the future of your organisation - and that is what business cases should be about.

The problem is that often these two things - business case documents and investment decisions - get disconnected. Executives often make major decisions about direction and investment in advance. Even when these are good, risk-based decisions made in the face of incomplete information and an uncertain future the executives can become uncomfortable. They then commission teams to develop lengthy documents which provide more reassuring (but less accurate or outright false) summaries of how the decisions were made. Bureaucratic funding processes can evolve in an attempt to change executive decision making behaviour but this usually fails and just encourages bigger and less useful documents. Sometimes they grow so large that business case justification is needed for the cost of creating a business case document!

Keeping IT in its place

An additional kind of disconnection can occur when it comes to IT. Some good ideas, such as cloud computing, analytics and collaboration platforms, are tools which can create great value, when they are in the right hands. The value of these ideas and the return on any spending on them comes from how they are used. Unfortunately, business cases in these areas often disconnect the intention to spend money on IT from the obligation to do all of the extra work necessary to realise the benefits. In the worst cases one combined transformation is split into two parts - an “IT” case and a “Business” case.

If this was just an issue of presentation it might not be much of a problem. Unfortunately, these disconnected business cases can help to fuel disconnected governance and delivery teams who become absorbed in one part of the challenge (e.g. acquiring IT) and neglect the others (e.g. realising benefits by changing business operations). Some opportunities which would be best handled by a small multi-disciplinary team get escalated to cross-programme executive committees or, more likely, will get lost in the bureaucracy.

Take pride in good decisions

The first step in changing all this is leadership. Executives need to take pride in their decisions and be transparent about how they work or deal with their discomfort by taking a more robust approach. Uncertainty will exist in any decision that is worth executive attention so this should be acknowledged and used. Executives need to seek out insights and experience, encourage constructive challenges and take lessons from past failures.

Appropriate tools can help. A flexible and lean tool comes from the UK Treasury. The five case model and the supporting guides provide a well thought through framework which can scale from the relatively small changes in direction made within programmes to the multi-billion dollar choices which impact the well being of nations or the survival of global companies. It can be used to clearly set out how decisions have been made or, better still, provide a sound approach for making a decision in the first place. As someone with an engineering background working on digital transformations I find the approach sits very comfortably with the design process and iterative delivery. It also provides a great way to navigate between different forms and layers of governance, say between the very user-centric, agile governance of digital service development and the more executive-centric, procedural governance which often applies to funding.

Stepping up as the CIO

CIO’s can help address these problems and if necessary inject the right kind of leadership into the CXO suite.

• Set out your expectations for how sound investment decisions should be made
• Give clear guidance to your team (point them at the UK Treasury guidance as a start)
• Insist that artificial or incomplete business justifications are developed further
• Provide a role model by being transparent about how you make your decisions
• Diplomatically challenge poor behaviour by your CXO peers.

Do business cases excite you or send you to sleep? Let me know what you think by adding a comment or using the Twitter button below.