Reliable Business CaseThe method and tool that show how your IT solutions and investments in business effectiveness and growth becomes profitable in a reliable way

2012-06-20Note; This presentation is optimized for reading rather than presentation.

Method Reliable Business Case and RBC Excel Tool owned by Tyrone Skogstrom, + 46 (0) 702 94 32 02 | tyrone@reliablechange.eu

Beta - Template'Improvement' cost minus 'As-Is' cost (RVA)

Benefits Value Impact on result Avg Per YrReliable Column6

Reduced licens cost 1 089 299 2% 217 860

VisibleNew services in current internet bank 14 504 616 25% 2 900 923 Reduced call center overflow cost 2 792 436 5% 558 487 Second line support cost reduction 3 723 248 6% 744 650

AssumedOn line liquidity diagram 11 437 642 20% 2 287 528 Saved CC agent time due to shorter calls 0 0% - Reduced time to send & receive agreements 2 978 598 5% 595 720

Expenses Value Impact on result Column8Avg Per YrReliable

0 0% - Documentation -800 000 -1% 160 000 -

VisibleRedesign IT department into buyer -4 859 410 -8% 971 882 - Testing -2 600 000 -4% 520 000 - Development -6 000 000 -10% 1 200 000 -

AssumedSoftware licenses -6 446 496 -11% 1 289 299 - Maintenace -789 299 -1% 157 860 -

ABS Total amount of money at stake 58 021 045 100% (ABS value)

Reliability,The RFP table can be used in several ways.

First, if you do a quick benefits screening or business case, you can in the RFP table identify what has the combination of low reliability and high impact. These should be the first to prioritise when you add hours to complete your analysis.

Remember, the early mentioned definitions of the three reliability categories With higher reliability category follows higher likelihood the money will occur for real in your future. A business case is not a forecast of money, it is a forecast of business change. Relibale Business Case method defines the categorise in a way, the insight of real business change and future actions of change is demanded, to climp up in the chain of categories.

Follow-upSuppose we have an old business case with 'As'Follow-up' and in the top part of this sheet, you select compare the new figures with an old version of the table you have stored, and identify the differences.

BUT even better, you select difference between them in plain view. You get the money you outperformed or underperformed.

Benefits RealisationIf you understand the concept of Benefits Realisation, you know how important this function is. You will not use this to see if you historically underperformed. No and their impact on the results.

Reliable Business Case is a method that not only make your excel data and estimates more reliable, the actions you undertake to sort them into categories and chase for higher reliability, actually themselves make the case more likely to be acheived.

Read more about how you order you Reliable Business Case Handbook on www.reliablechange.eu

Benefit Analysis for IT investment- RBC is a method supported by an Excel toolGet reliable benefit value expectations and greater control of the investment risk, make decisions based on reliable data, use the strong follow up support, and encourage benefits realisation.

Method & RBC Excel ToolTM

Method Reduce the decision process, support follow-ups, and improve

the likelihood for business benefits to occur in reality ”PreAnalysis” gives quick results highly time efficient Based on full economic lifetime, all benefits, and all cost

Standard training offered by Astrakan Strategic Education or tailored at your site, English or Swedish

Worldwide support offered to implement Reliable Business Case method and a framework for Benefits Realisation in your organisation or as consulting method

RBC Excel Tool Makes the method easy and practical to work with Documentation of benefits, cost, KPIs, business

benefits and their results, risk, dependencies, sources Offer ROI, Cost-Benefit Ratio, Payback, Cash flow,

Benefit diagram, Cost diagram, Opex/capex chart, internal/external cost, follow-up table, and more

Systematic and reliable calculation of business benefits and cost for all kinds of investments in business change initiatives

The tool free to download from www.reliablechange.eu

RBC activities

Ensures your investment is the best possible, find all business benefits and all lifetime cost. Report all data you need to make a quick and reliable decision process.

Combinations:• ’Quick Benefits

Screening Only’ for several possible alternatives

• Quick investment cost assessment for risk projects

• QuickAnalysis for budget purposes.

RBC activities

Optional tools and actions to make a reliable case. Benefit Map link cost, process change and results together. Acceptance phase creates acceptance from the organisation.

Combinations:• Iterative loops of

’QuickAnalysis’ and ’Improvement Phase’ give high reliability and low risk using the lowest number of hours possible.

• Benefits Map can be done before, together or after the ’RBC standard’ activities have taken place

Benefits with RBC method and RBC Excel ToolTM

Standardised The method supports all investments that are leading to better business effectiveness and

organisational improvements. Great support to all kinds of business development, not only IT system related Standardised format on documentation, formulas, and calculation Support standardised monetary conversion of benefits and cost evaluation Support international financial norm

Gives your analysis internal legitimacy and shortens the decision process Systematical methodology how to calculate monetary value from benefits, fast analysis, reliable

results, fantastic report design Shows Cash flow, Payback, ROI, IRR, Cost-Benefit Ratio, and much more

RBC Excel Tool RBC Excel ToolTM supports the method’s activities and gives all information you and your controller

need to take decisions. Especially supportive to follow-up activities. Explains optional alternatives clearly

The Excel Tool can compare up to six alternative solutions, such as different tenders, or different cloud/sourcing options

Consider all cost Capital cost, operational cost, cost for business change. Separates internal and external money. Tell

you if the money will be visible in the result sheet. Improves your cost control. Consider all benefits

Both tangible and intangible benefits. Excellent method for public organisations that want to consider intangible benefits.

Many benefits in the business enabled by IT solutions are hard to put into monetary terms. RBC considers all benefits and gives the decision makers a true picture.

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NyttorealiseringRBC method is integrated with benefits management strategies and benefits realisation activities. It improves the chance that the benefits will occur in reality, and here you see how RBC relates to such activities:

Services for maximal business value from IT

Reliable business casesReduced IT cost

Increased business valueControl of IT expenses

Governance of business change

Investment Justification RBCReliable Business Case analysis deliverables:

A summary Description of investment alternatives How the investment’s result and scope can be improved

A screening of all incurred cost needed to create the results

Capital & operational expendables Internal & external cost

A screening of benefits the business should create Qualitative & financial, tangible and intangible

Documentation of several investment drives Results, cost and benefit drives, reliability, risk, dependencies

Recommendations Best alternative based on tangible money and intangible values Measures to minimize risk and not exceed cost Measures to increase likelihood the business befits will occur for real

The usefulness of the analysis:• It points out the investment with best

benefits and lowest cost possible• Knowledge what is financially expected• Awareness of risk, internal and

external expenses, OpEx and CapEx, potentials, dependencies

Implementation of framework and process; Reliable Business CaseChange Management deliverables:

Knowledge Training in business economics, investment analysis,

RBC methodology Understanding how true benefit and profitability arises Understanding of RBC Excel Tool’s report and diagrams

Process change Benefits and expense screening workshops Explore and document decision and governance processes Adopt and align RBC with present processes Policy development of variables and thresholds with high impact on the result

Proficiency Practical training in using the RBC Excel Tool Coaching to carry out; analysis, workshops, and reporting “Learning by doing” support and mentorship

Tools RBC Excel Tool, Benefits Map’s Visio-template Templates for reporting, power point & word Check lists, e.g. for decision makers to challenge the results, or to find all expenses

Benefits with RBC in your processes:• More profitable business

change• Quicker decision process and

continuously faster business improvements

• Decision-makers understand analysis, result and implications

• Business manager’s insight to their own part to play in the benefits realisation process

• Better cost control and forecast

• Follow-up business results• Compares easily several

alternatives to ensure best decision

Implementation of framework and process; Benefits RealisationChange Management deliverables:

Knowledge Training in investment analysis and RBC methodology,

benefits management, business change management

Process RBC processes, decision process, controlling process, program management, benefits

realisation Integration to present processes with RBC and Benefits Realisation Establish policies of important variables and thresholds; to calculation, risk escalation, and

investment decision

Proficiency Practical training to using the RBC Excel Tool Coaching to carry out; analysis, workshops, and reporting Coaching role of Benefits Realisation Manager, programme board member, controller

Tools Establish RBC Excel Tool, Benefits Map’s Visio-template, Benefits Register etc. Support to implement new or adapt current tools for Operating Control to support benefits

management Powerpoint & word templates; for benefits realisation planning, status reporting, etc. Check lists, e.g. for decision makers to challenge the results, or to find all expenses

Benefits with Benefits Realisation in your processes:• No ”ROI by Chance” anymore• Pace of investment and business

change increases, and with that y0ur profit

• Reduced IT lifetime cost• Follow-ups ensures value

realisation• Programme office brings together

IT, finance, HR, into a business improvement focus

• Governance and business intelligence improves

Amplified sourcing serviceDeliverables; Result control and improvement of present service and agreement

Appraise the service from your business’ point of view Evaluate your original business case and convert it to RBC Result control, invoices, cooperation (not focus on SLAs) Cost- and agreement analysis

Pursue business improvement potentials How current services deliver business benefits to you Find business-service linkage and possibly more sourcing requirements Possible cost reductions

Analysis & recommendation Agreement requirements, or possible reformation of the present

agreement Alternatives guidance Advise content and scope Advise to measure outsourcing’s

business benefits

Benefits with the service:• Outsourcing appraise from the

eye of a business manager• Decision support if you consider

extending your partner’s agreement

• Improve business results from planned or current agreement

• Added value to business • Cost reduction

This service focuses on your business need, excluding technical performance evaluation (if they do not affect your business)

Quick IT cost reductionEnable IT cost reduction in short term

IT Agreement analysis & management Content and scope, valid periods & end date, contract cost Set up agreement register and improvement roadmap

IT Cost analysis Based on budget, invoices and account table IT license analysis Current projects

Analysis & plan Service provider’s relation and service fulfilment Service reformation & cost reduction Market analysis & recommendation Target description and activity list

Benefits with the service• Cost reduction and cost control• Verification that charges are

correctly made• Clear picture of supplier/service

provider performance• Control of coming agreement

negotiations• Decision guidance of what

(more) can be outsourced /BPO• Focus to activities with results

visible this year