Transcript Slide 1

Foundation in Business Analysis
Session 9
• MAKING BUSINESS AND FINANCIAL CASE
Carmen David, Senior BA
Business Analysis
What is a Business Case?
• A business case is a key document in a business analysis project
where the analysts or consultants present their findings and propose
a course of action for senior management to consider.
• A business case is a sales document, aimed at getting people to
take a decision.
• Key rules of successful selling apply
– stress the benefits, not the features;
– sell the benefits before discussing the cost and get the ‘buyers’ to understand the
size of the problem – or opportunity – before presenting the amount of time,
effort and money that will be needed to implement a solution.
Carmen David, Senior BA
Business Analysis
Business Case
Carmen David, Senior BA
Business Analysis
The Process for developing a Business Case
Carmen David, Senior BA
Business Analysis
Aspects of feasibility
Carmen David, Senior BA
Business Analysis
Structure of a Business Case
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Introduction;
Management summary;
Description of the current situation;
Options considered;
Analysis of costs and benefits;
Impact assessment;
Risk assessment;
Recommendations;
Appendices, with supporting information.
Carmen David, Senior BA
Business Analysis
Costs/Benefits analysis
Carmen David, Senior BA
Business Analysis
Tangible costs
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Development staff costs
User staff costs
Hardware
Infrastructure
Packaged software
Relocation
Staff training and retraining
Ongoing costs
Carmen David, Senior BA
Business Analysis
Intangible costs
• Disruption and loss of productivity
• Recruitment
Carmen David, Senior BA
Business Analysis
Tangible benefits
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Staff savings
Reduced effort and improved speed of working
Faster responses to customers
Reduced accommodation costs
Reduced inventory
Other cost reductions
Carmen David, Senior BA
Business Analysis
Intangible benefits
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Increased job satisfaction
Improved customer satisfaction
Better management information
Greater organizational flexibility
More creative problem-solving time
Improved presentation or better market image
Better communications
Carmen David, Senior BA
Business Analysis
Impact assessment
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Organization structure
Interdepartmental relations
Working practices
Management style
Recruitment policy
Appraisal and promotion criteria
Supplier relations
Carmen David, Senior BA
Business Analysis
Risk assessment
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Description
Impact assessment
Probability
Countermeasures
Ownership
Carmen David, Senior BA
Business Analysis
Investment Appraisal
Carmen David, Senior BA
Business Analysis
Net present value
Carmen David, Senior BA
Business Analysis
Internal Rate of Return
• This is a calculation that assesses what sort of return on investment
is represented by the project in terms of a single percentage figure.
• It can then be used to compare projects one with another in order to
identify the better investment opportunities, and to compare them all
with what the same money could earn if just left in the bank.
• For example, if the IRR of a project is calculated at 3 per cent and
current bank interest rates are 5 per cent, then on financial grounds
alone it would be better not to spend the money.
Carmen David, Senior BA
Business Analysis
Presentation of a Business Case
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Think about the audience
Keep it short
Consider the structure
Think about appearances
Carmen David, Senior BA
Business Analysis
Benefits Management and Realization
Carmen David, Senior BA
Business Analysis
Thanks you!
References:
Business Analysis 2nd edition by Debra Paul (Editor), Donald Yeates (Editor),
James Cadle
Carmen David, Senior BA
Business Analysis