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 | [email protected]
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