Fiscal Year 2018
Full Business Case Instructions
& Template
Contents
Full Business Case Overview 3
1. Executive Summary 4
2. Business Problem and Opportunity 4
3. Proposed Project Objectives/Performance Metrics 4
4. Risks 5
Common IT project risks include 5
5. Alternative Solutions 6
6. Preliminary Research and Analysis 6
7. Cost/Benefit Analysis 6
A. Total cost of ownership 7
B. Benefits 8
8. Recommendation/Phasing Options 8
Full Business Case Overview
A business case is a written proposal that recommends an endeavor to executive management and the legislature for new or enhanced information technology project funding. The business case presents the business problem or opportunity that serves as the basis for the project funding requests made by the agency on the corresponding forms, i.e. a business case must have a corresponding “C2” form. The C2 is available at http://www.doit.state.nm.us/agencyc2_guidance.html.
As defined in the Department of Information Technology Act, information technology project means the purchase, replacement, development or modification of a hardware or software system; and information technology means computer hardware and software and ancillary products and services, including: (1) systems design and analysis; (2) acquisition, storage and conversion of data; (3) computer programming; (4) information storage and retrieval; (5) voice, radio, video and data communications; (6) requisite systems; (7) simulation and testing; and (8) related interactions between users and information systems.
The business case must make a convincing argument for investment of New Mexico funds to solve an agency’s business needs, enhance its ability to meet its mission and goals or respond to a specific opportunity. The business case must make clear its compliance with the State IT Strategic Plan, the Governor’s Executive Orders and initiatives, the framework for Enterprise Architecture Plan, information technology consolidation, and established agency strategic and IT plans. Each of these context items are key to the reviewers’ understanding the agency’s justification for the proposed solution and why State of New Mexico funds should be applied to this initiative.
A well-written business case provides a simple narrative for reviewers that are not expected to have direct experience in the agency’s business or the technical knowledge necessary to carry out the project. Language used in the business case is important. Avoid the use of unexplained acronyms, agency or IT technical terms. Fully explain problems, opportunities, processes, and impacts of regulations. Be as concise as possible. Evaluate every idea or detail in terms of why the reviewer needs to know this, and how it underscores the argument for funding this solution.
If submitting more than one business case, please indicate the priority in a ranked order on the cover of each project and on the C2 form. The ranked order should correspond with the agency’s priorities within their overall strategic goals and missions. Please rank the highest priority project with a “1,” the second highest priority project with a “2,” and so forth. Multiple requests cannot all be ranked with the same priority.
A project should be an important undertaking with a discernible beginning and end, involving a major change or upgrade in the technology already in use in the agency; or changes in work processes or work products for a substantial part of the agency business personnel; or changes in work processes or products serving the public. A project includes the purchase, replacement, development or modification of hardware or software system.
The Full Business Case must use the headings described in the following.
1. Executive Summary
The executive summary briefly and clearly presents and explains the most important business reasons for initiating and supporting the proposed project. Projects provide solutions to business problems and therefore there may be several potential solutions. The executive summary must explain why your project is the best or most advantageous solution, in other words, why is the solution being requested. Include whether this project has been funded in previous years or is part of a phased implementation.
2. Business Problem and Opportunity
A problem is something that is keeping the agency from efficiently meeting its stated purpose. An opportunity is something what will enhance the agency’s ability to satisfy its mission. Explain the business problem faced by the agency, the root cause of the problem, and the opportunity the agency has to solve the problem through an IT solution. Include in this presentation the business impact that the problem presents to the agency in the fulfillment of its business performance, mission, goals, objectives, and how the solution is aligned with the agency strategic plan, agency IT plan, statewide strategic plan and overall state priorities/initiatives, as applicable. If relevant also cover any cross agency collaborations and impacts, statutory/other requirements etc.
If the proposed solution presents a unique opportunity for the agency to better serve the State of New Mexico, the agency should detail those services or needs not currently being addressed. List the benefits to the agency and its constituents.
Explain the proposed project – what specifically is the solution to the business problem, in-house developed or off-the-shelf, or transfer system; number of people involved; technical platform; leveraging existing resources; adding resources, etc.
If applicable, include impact of not obtaining funding or the funding amount requested. What might be the cost to the agency or its constituents of not solving the problem identified? What might be the cost to the State of New Mexico if the opportunity identified is not met by the agency?
3. Proposed Project Objectives/Performance Metrics
If funded, the agency must organize the efforts to remove the business problem(s) identified or to take advantage of the business opportunity or opportunities identified. In organizing these efforts into a project, the specific business and technical objectives of the project must be identified and quantified. It must include the implementation steps that the project will take toward transitioning the solution into production.
Any such project will have specific, measurable, attainable, realistic and timely goals that are first outlined in the business case and then translated into project business, technical, and operations requirements. In this full business case, the agency is expected to list its business and technical objectives in specific, the steps required to achieve the objectives, and whenever possible measurable terms. In evaluating a proposed project, reviewers will be looking for statements such as “reducing the agency’s 24 hour response time for a client request to 4 hours.” Objectives should be tangible and measurable.
4. Risks
Risks are potential impacts to the success of any business project. A project or business proposal is usually not judged on the amount or even magnitude of its associated risks, but on how these risks are to be mitigated in the project. Reviewers of the business case will evaluate the proposal’s recognition of possible impacts to the success of the financial investment requested.
Include assumptions made in the planning process, as well as constraints that the project needs to consider. Risks can impact the timing of the project, the cost of the project, and the quality of work effort. Multi-year funding could be a risk; securing agreement among multi-agencies could be a risk; a single vendor providing a software solution to an agency problem could be a risk.
Other common IT project risks include:
Internal Risk Factors
· Dependencies on other internal system projects
· Inadequate staff resources
· Inadequate management commitment and support
· Internal competing interests
· Organizational readiness
External Risk Factors
· Dependencies on other system projects
· Mandates for project time lines
· Future funding uncertainties
· State government re-organization
· Changes in state or federal laws
· State competing interests
· Technological
Agencies should include how the project will plan to mitigate or reduce the impact of the identified risks to the project.
5. Alternative Solutions
Compare the proposed business project to alternative solutions using well-presented research data and analysis to back up the agency’s result. If a phased approach is feasible, briefly explain the impact and the concept of the phased approach. Include well-researched alternative solutions, one of which must be “maintaining the status quo.” Alternatives might include in-house development vs. commercial off the shelf products, acquisition alternatives, and hardware and/or software platforms.
The alternatives must all comply with the State IT Strategic Plan, Governor’s initiatives, the Framework for Enterprise Architecture Plan, the Information Technology Consolidation Plan, and established agency strategic plans. Each alternative must include a brief functional description.
6. Preliminary Research and Development
Include preliminary research and analysis used to derive the proposed solution and alternatives. Demonstrate preliminary planning efforts that have been undertaken / completed to provide basis for the proposal.
7. Cost / Total Cost of Ownership (TCO)
The Full Business Case is a funding request for a project. If successful in its funding request, the agency will be carrying out an IT project that will be tasked to achieve the business and technical objectives that have been established in this business case.
Because the business case is asking for funding, as well as agency staff and resource involvement, the reviewer will be asking if this solution is a good financial investment and whether the initial planning evidenced in the business plan indicates that the agency is a good financial partner in this project.
Projects and their underlying business cases must make financial and resource sense. This must be demonstrated in the business case, both in terms of whether all financial considerations have been made, and what overall benefits will come to the State of New Mexico and to the agency from the project, whether savings, increased efficiency, benefits to an agency’s mission, related citizens, or efficiency of staff operations. If applicable, include an estimated procurement timeline in the project timeline.
Some specific tips for financial comprehension:
a. STATUS QUO: Clearly outline all costs for maintaining the status quo and not implementing your proposal. Provide realistic and supportable numbers for these costs.
b. Project the costs for maintaining the status quo into the future for comparison against your proposal.
c. PROPOSAL: Clearly outline all costs to implement your proposal. Provide realistic and supportable numbers for these costs.
d. Project the costs of maintaining your proposal through the five-year period requested in the full business guidelines.
e. Compare the costs of maintaining the status quo with the costs of implementing and maintaining your proposal. Clearly illustrate all calculations and results.
f. Compare the future costs of maintaining the status quo with the costs of maintaining your proposal over the same period of time. Clearly illustrate all calculations and results.
Other considerations include:
a. What hardware is required for project implementation and ongoing operations? This analysis should include acquisition of new hardware and the utilization of existing resources such as enterprise technology services. Consider all related hardware needs (i.e., computing, storage, and communications). Consider impact on ongoing hardware maintenance. Is any non-IT equipment required?
b. What are the software acquisitions and ongoing maintenance costs? Ensure that cost assumptions reflect projected growth of utilization and the impact on the licensing model. If the software implementation supports a changed business process, what are the associated costs on the business side to change those processes?
c. Add the costs of any third-party services utilized in the implementation or ongoing operations not covered in other categories. Examples could be consulting services or other outsourcing services.
d. Include any costs for training IT and business personnel in implementation and ongoing operations.
e. Include any costs for other services including, Project Management and IV&V services.
Forecast the tangible and intangible life-cycle costs of each alternative for five years. Include total projected costs for implementation and maintenance, i.e. non-recurring and recurring costs, and IV and V. Identify funding, other than the general fund, if other sources are available. Costs must include initial investment, one-time costs, and ongoing operational costs, once the business project has been implemented.
For each alternative, determine the total potential costs to develop or acquire, implement, operate and maintain the proposed project for its entire life cycle. All costs (e.g. personnel, hardware, software, maintenance, enhancements, training, replacement, revenue generated due to the new system, reduction in recurring costs to help offset the overall cost of the project, and any other services that are not captured within other categories considered over the life of the solution) associated with the business project must be identified as follows:
1. Non-recurring costs
List all non-recurring (one-time) costs for the development and implementation phases of the project and identify them with anticipated funding sources.
2. Recurring costs
List all recurring (incurred more than once) costs for operating and maintaining the solution throughout its life cycle. How will recurring costs be funded?
8. Benefits/ Return on Investment (ROI)
With the exception of projects focused solely on improving internal IT operations, the agency owns the task of identifying and projecting the benefits. IT should participate in the response; however, the business must ultimately own the estimation of benefits. List in a concise manner the benefits (tangible and intangible) that will be derived from the potential project to each alternative. Where possible, express benefits in terms of dollars. Potential benefits may include:
People – improve workforce efficiency, increase span of control, develop process/subject matter experts, centralize customer service, enhance the delivery of services to constituents, etc.
Process – reduce transaction processing time, eliminate non-value-added tasks, minimize errors/network, standardized processes, improve response time, reduce the cost of IT operations through an enterprise model, etc.
Technology – Increase system reliability and stability and data quality, reduce complexity, lower future development costs, reduce software purchase price and license fees, reduce on-going support costs, etc.
Business – Create new revenue streams, increase revenue, shorten constituent service times, improve customer satisfaction, react faster to business change, etc.
9. Recommendation/Phasing Options
Based on the information presented, clearly state which proposed solution the agency recommends and why. Also include recommendations for phased funding, if appropriate. For example, how much funding would be needed to complete a particular project phase/module/activities in the next year should there be limited funding.