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Business cases aren't a waste of time

Are business cases just bureaucratic wastes of time and effort? My take has always been that business cases are valuable ways to describe and contrast potential project investments in order to make effective financial and business trade-offs. But the opposing view was voiced by several people at a recent conference. Do they have a point?

I don't think so. What they have instead, I suspect, is experience in IT organizations that use business cases as a way to avoid work. Asked if a new capability is possible, IT demands a business case before participating in discussions. Informal conversations and brainstorming are stymied by IT's refusal to have any substantive discussion on projects without a business case. These IT organizations are lazy and misguided, misusing business cases as a shield against doing productive work.

Properly used, business cases provide important information and valuable benefits. Among other things, they do the following:

• Facilitate fact-based discussions. Which is better: projects funded based on the presenter's emotion, volume and political power, or on facts, logic and detailed analysis? A business case captures relevant facts (such as scope, costs, timetable and risks) that promote unbiased business decisions. This fact-based approach reduces opportunities for personal or political attacks during funding discussions and protects against unnecessary bad blood between departments.

• Enable enterprisewide trade-offs. A standard business-case format helps the executive team determine objectively which investments provide the highest return, by ensuring consistent information and facilitating apples-to-apples comparisons. The fairness of this approach works against backroom horse-trading and backdoor, rogue projects.

• Demonstrate the commitment of an executive sponsor. Successful projects require an executive sponsor who acts as both cheerleader and champion. As the project's primary advocate, the executive sponsor should be actively -- and visibly -- involved in all aspects of the business case from early on.

• Force scope and capability agreement. Large programs are frequently broken into multiple projects or releases. Beneficiaries of the new capabilities sometimes become both enthusiastic and demanding and may "forget" that a particular capability was never intended for the initial release. A business case with a clear scope statement has saved more than one CIO from postimplementation attacks.

• Form the basis for benefits tracking. Well-written business cases include the specific, measurable benefits expected, as well as the metrics and processes needed to measure results. Improved results represent benefits realized. Get credit for the improvements your project has delivered!

Resistance to creating business cases for significant projects is ridiculous. Companies cannot afford to fund projects that will ultimately fail, wasting precious corporate resources. Comprehensive business cases ensure that project costs, risks and benefits have been appropriately evaluated before the first dollar is invested.

Business case analysis is a sound business practice that provides a solid foundation for business decisions, and a strong defensive weapon against opponents who might challenge the viability of your project. Or you could just return to the "squeaky wheel gets the funding" approach and take your chances.

Bart Perkins is managing partner at Louisville, Ky.-based Leverage Partners Inc., which helps organizations invest well in IT. Contact him at BartPerkins@LeveragePartners.com.