Chapter 9 -Making a Business and Financial Case Flashcards
At what stages should the Business Case be reviewed?
Feasibility study
Requirements Analysis
Solution design
Solution development
What is the process for developing options for a business case?
Identify possible options
Shortlist options
Evaluate shortlist
Take options forward to business case
Why should “do-nothing” be included as an option in a business case?
Showing the risks and consequences of doing nothing makes the case for other options.
What three headings of Feasibility need to be considered?
Business
Technical
Financial
What tools can be used for assessing feasibility of a business case?
PESTLE
Force-field analysis
What is force-field analysis?
Consider which forces inside and outside the organisation will support and oppose the proposal.
What factors will go into force-field analysis?
Feasibility results
PESTLE
Stakeholders
What are the sections of a business case?
Intro
Management Summary
Description of current situation
Options considered
Analysis of costs and benefits
Impact assessment
Risk assessment
Recommendations
Appendices
What should the intro of a business case contain?
Set scene
Explain why being presented
Methods to examine the issue
What should the Management Summary of a business case contain?
What the study was about and issues considered
Summary of options with principle advantages and disadvantages
Clear statement of recommendation
What should be included in Description of current situation in a business case?
Explain where problems and opportunities lie.
What should be included in Options considered section of business case?
Options considered
Explanation of why rejecting
More details around option recommending.
What should be included in Cost-Benefit Analysis section of Business Case?
Immediate and longer-term
Tangible and intangible
Give examples of tangible costs
IT Development staff costs
User staff costs
Equipment
Infrastructure
Packaged software
Relocation
Staff training
Ongoing costs
Give examples of intangible costs
Disruption and loss of productivity
Recruitment
Give examples of tangible benefits
Staff savings
Reduced effort and improved speed of working
Faster responses to customers
Reduced accomodation costs
Reduced inventory
Reduced overtime
Give examples of intangible benefits
Increased job satisfaction
Improved customer satisfaction
Better management information
Greater organisational flexibility
More problem solving time
Better market image
What are Avoided costs?
Situations where a business has to do something and had already budgeted for it; that budget can be offset against more radical solution that offers additional benefits.
Give examples of what might be included in Impact assessment of business case?
Organisation structure
Interdepartmental relations
Working practices
Management style
Recruitment policy
Appraisal and promotion
Supplier relations
What should be included for each risk in a business case?
Description
Impact assessment
Probability
Mitigation
Ownership
What should be included in the Recommendations section of the business case?
Summary
Make clear decisions asking senior management to take.
Outline main tasks and timeline
What should be included in appendices if business case?
Detailed information
Stats
What is an investment appraisal?
Financial aspects of the business case are contrasted to see when project will pay for itself
What is a discounted cash flow?
Cash flows after Year 0 are adjusted to today’s value of money using a ‘discount rate’ to show a net present value
What is internal rate of return?
Calculation that assesses return on investment in a percentage figure
What is internal rate of return used for?
Compare projects to see which are better investment opportunities and with what interest rates would earn if the money was left in the bank.
How is internal rate of return calculated?
Finding at which point the discount rate causes the Net Present Value to be zero
What needs to be considered when presenting a business case?
Audience
Brevity
Structure
Appearance
What are RAID and CARDI logs used for?
Ongoing management of changing factors within a project.
