Putting “Business” back in the “Business Case”

Tucked near the back of CFO Magazine’s April, 2013 edition is a research report titled “Many Unhappy Returns.” Of the 153 companies represented, almost two thirds spend seventy percent or more of their IT budgets on merely maintaining current IT capabilities.

According to many CFOs, the firm really needs to set aside more of this money for investments that will move the business forward in growth and profits. This frustration is a reasonable sentiment. Diverting scarce capital into projects that merely “keep it running” are hardly awe-inspiring.

But what jumped out at me was one culprit, or should I say scapegoat, that many CFOs blamed. One respondent was quoted saying that the “basic foundational structure of IT is inadequate to take the company forward, but no one can build the business case to tackle it.” (emphasis added)

Really? The current infrastructure is holding the company back but no one can demonstrate the value of improving it?

This was mind-boggling… until I read further where one suggested fix is to develop “a more active role for sponsors from business or functional units in assessing the costs and benefits of improve-the-business IT projects.”

Well… There’s Your Problem
Reading between the lines, the business folks are barely, if at all, active in building the business case for IT projects. The work is left to IT folks because, well, it’s an IT initiative. Right?

Wrong. As I wrote in “When Is An IT Project Not An IT Project?” ALL projects should start as BUSINESS initiatives trying to solve a BUSINESS problem or exploit a BUSINESS opportunity. After all, we call it a BUSINESS case, right?

Front & Center
So if we are building a business case, where should the business people be?

Not only should they be active “in assessing the costs and benefits of improve-the-business IT projects,” people from the business should also lead the initiative from the outset.

This change in team composition produces multiple benefits:

  • Technology investment are better aligned with business strategy
  • Costs are reduced as business folks identify and remove low-value functions
  • Sometimes  non-IT solutions are discovered in what was initially assumed to be an IT problem.

So when the next IT project launches, dump the “IT” label and replace it with “Business” …then staff the team accordingly.

© 2013 Verax Point

About Dave Wittenberg

I am all about equipping business teams to enjoy greater payoffs on their biggest bets. I bring a unique combination of evaluation expertise and behavioral insights developed over the course of more than 300 major strategic initiatives. Applying a highly effective, disciplined framework, teams unleash their full capabilities to generate better solutions, wring out hidden waste, and deliver superior returns. Specialties: Investment Evaluation, Decision Excellence, Strategic Analysis, Mergers and Acquisitions, Investor Relations, Leadership Development, Education & Training
This entry was posted in Framing the Question, IT, Team Effectiveness. Bookmark the permalink.