Busines Case

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    Presented By:

    Suresh Kumar V

    10257293

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    Definition Of Business Case

    y Business Case is a well-structured written document, that

    contains :

    y Information about background of the project(Problem Statement),

    y The options considered(Alternatives)

    y the expected business benefits(Benefits)y the expected costs of the project(Cost)

    y A gap analysis and the expected risks(business allignment and

    risk)

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    Structure Of Business Case

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    Introduction To Val IT

    y Val IT is a frame work that supports the business goal

    by realizing optimal value from IT-enabled business

    investments with an acceptable level of risk.

    y Val IT will enable Management to:

    y Increase the understanding and transparency of cost, risks

    and benefits.

    y

    Increase the probability of selecting investments thatgenerate the highest return.

    y Reduce the risk of failure, especially high-impact failure.

    y Reduce the surprises relative to IT cost and delivery.

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    Need For Val IT

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    ABC Corp. Business Case

    y About the Company:

    y ABC Corp. is an medium size manufactures of specialized test

    equipments, sold to electronic product manufactures world wide,with the annual revenue of $520 million.

    y Business Drivers:

    y To increase the market share and firms ability to respond to new

    market development so as to improve the competitive advantage,

    and to accelerate the introduction of new products.

    y Solution:

    y Introduction of Global Knowledge Base on organizations

    Intranet.

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    Benefits Of IT investment(GKB):

    Improving Engineers Productivity and loyalty is the core

    advantage. Improvement in Quality of goods produced.

    Increase in customer satisfaction.

    Reduce Time for market(new products)

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    Net Present Value (NPV)is a method for evaluating the profitability of an

    investment or project. The net present value of an investment is the present

    (discounted) value of cash inflows minus the present value of cash outflows.

    IRR: It is defined as the discount rate which aggregate present value of the netcash inflows with the aggregate present value of cash outflows of a project. OR

    the rate at which NPV is zero.

    ROI:

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    KLM Business Case

    y About the Company:

    y KLM is an Netherlands based airline company founded in1919. In 2004, KLM merged with Air France.

    y Business Driver:

    y To introduce better governance principles and practices.y The IT architecture and infrastructure will enable the growth

    ambitions of Air France-KLM.

    y In support of this driver a business/IT board wasestablished, composed of the CEO, CIO and all businessunit EVPs

    y A project was initiated under the title IT: A CollaborativeEffort was launched.

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    y Governance principles and practices

    y For a business there should be no difference between working

    with an internal and external IT provider

    y Improve the demand function by creating Business Demand

    Office per business domain.(passengers, cargo, maintenance,

    operations and so on)

    y Improve the supply function by creating Innovation Organizer

    and a Service Manager per business domain.y Focus on cost that can be influenced in full and those that can

    be influenced in part: Innovation and Continuity.

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    y Benefits:

    y Lower IT continuity cost per business production unit;

    y Increased capacity for innovation;

    y Increased alignment of investments to strategic goals

    y More trust between all involved stakeholders; and

    y Moving beyond cost thinking towards a value culture.

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    y Conclusion:

    y The implementation and ongoing assurance of enterprisegovernance of IT has restored trust between business and IT,

    lowered business operating costs through more rigorous selection

    of investments, and freed up funds for innovation.

    y Although all organizations, face some unique challenges,

    concerns around effective governance of IT, and the realization of

    real business value and increasingly complex investments in IT

    are a universal concern.

    y Growth in existing and new markets carries high risks, but the

    organization which operates with a common purpose, and is fully

    committed to its programmed of change from top to bottom can

    potentially reap high rewards.

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    Reference:y ITGI (2006), Enterprise Value: Governance of IT

    Investments: The Business Case.

    y Van Grembergen, W. and De Haes, S. (2009). Enterprise

    Governance of IT:Achieving Strategic Alignment and Value.

    New York: Springer.

    y ABC Business Case: Keen JM & Digrius b (2003) Making

    Technology Investments Profitable.