From Idea to Business Case Jimmy Vuccolo jvuccolo@psu.edu

Level Set

BRM Definition Business Relationship Management stimulates, surfaces, and shapes business demand for a Provider’s products and services and ensures that potential business value from those products and services is captured, optimized, and recognized – Business Relationship Management Institute

Engaging customers and Service Owners. BRM Customer Relationship Management Value Management Service Provider Partnership Engaging customers and Service Owners. Documenting and understanding customer requirements. Providing Service Owners with feedback about their services. Working with the customer to navigate the service catalog. Documenting customer’s KPIs based on their strategic goals.

Terminology Business Partner: customers, sponsors, etc. Provider: IT, Human Resources, Financial, and Health Care.

Material Source Business Relationship Management Institute's BRM Body of Knowledge (BRMBoK) HBR Guide to Building Your Business Case by Raymond Sheen with Amy Gallo

Value management

What is Value Management? Ties together into a holistic and comprehensive approach the concepts of Ideation, Value Planning, Portfolio Management, and the Business Case to capture, optimize, and communicate the business value of Provider investments and capabilities.

Uses for Value Management Identify initiatives that have the potential to create business value by positively impacting business drivers. Ensure that value is delivered by tracking progress against investment targets. Assist with priority setting for Provider investments. Evaluate competing investment opportunities. Avoid making the wrong investments.

Value Management Lifecycle Value Discovery – Define Ideation, Value Planning, and Business Case Value Realization – Refine Build and delivery phase of a project Value Optimization – Monitor & Improve Continual Service Improvement (CSI)

Value Management Process Project is chartered Develop Business Case Business Case Approve Business Case Value Creation Ideas Refine Ideas Value Creation Plan Monitor Value and Adjust Communicate Value

Value Management Process Capture Value Ideas – Examines ideas/possibilities for business value. Its output is an Idea Document. Create Value Plan – Plan for the value to be realized if the idea is pursued. Its output is a Value Creation Plan. Create Business Case – Completes a business case for investment. Approve Business Case – Analyzes submitted business case and approves based on strength. Capture and Communicate Value – Executes the value plan to track, audit and communicate the actual value generated.

Time Estimates Idea Document Value Creation Plan (optional) Facilitated interview session(s): 90-120 minutes Document generation: 1 business day Value Creation Plan (optional) Facilitated interview session(s): 60-90 minutes Business Case Development and generation: 7-14 business days

Approval Gates Idea Document Business Case Business partner: to ensure that idea was accurately captured. Provider: to ensure that this is an idea they want to pursue. Business Case Provider will be given a number of recommendations to solve the problem. They will select one based on cost and other factors. They can also elect to shelf the opportunity.

Idea document A high-level overview of an IT idea or an opportunity

Facilitated Interview Questions What is the name of the idea? Who are the key stakeholders? Define the idea What business driver(s) are impacted, how are they impacted and why? What is the business problem to be solved? What does the future state look like if the problem is solved? What is the value to the business?

Facilitated Interview Questions What are the consequences if the problem is not solved? What business process(s) will be changed and how? High level features and functions What is in scope for this idea? What is out of scope for this idea? What are the major assumptions? What are the constraints?

Idea Document Examples IT Alerts IBIS Reorganization and Complementary Accounting System

Pitfalls Turning the idea document process into a “solutioning” exercise. Ignoring the gates and going right to the business case.

Value creation plan Identifies how business value will be created and monitored if the idea is pursued

Value Creation Plan Components For each impacted business outcome, define: Definition of the impact Value by timeframe Reporting schedule How value is measured How long will value be measured Stakeholders Point of action

Value Dials Example Q1 Q2 Q3 Q4 Number of complaints associated with improperly worded alerts messages Planned 50 40 20 10 Actual 90 The actual value of 90 in Q2 will trigger a point of action where staff need to come together and determine why things deviated significantly from the planned amount.

Value Creation Plan Examples IT Alerts Office 365 Email and Calendaring

Recommendations Very important to define measurable items for the value dials. Stick with 3-5 value dials.

Business case Justification for a proposed project

Why do a business case? Justify pursuing an investment that will satisfy strategic business objectives and goals. Acquire full commitment by all stakeholders involved. Support the decision making process. Provide leadership with alternatives to address a problem identified in an idea document.

Business Case Components Executive summary High-level summary of problem and recommendations Project overview Rough project schedule Infrastructure impacts +/- impacts to infrastructure Strategic plan alignment Direct/indirect alignment to University strategic plan

Business Case Components Cost model 5-10 year costing of alternatives NPV, IRR, and ROI Benefits Risks Alternate solutions Value creation plan

Business Case Team Recommendations A finance representative -- costing and financial metrics A project manager – runs the project BRM – voice of the customer Subject matter experts – designer of potential solutions

Cost Modeling Depending on the request, either a 5 year or a 10 year cost model is developed. Staffing is based on mid-point of the salary band (OHR website). All salaries are adjusted to include fringe and GSI. Also includes costs for: hardware, software, IT services, operations, facilities and miscellaneous

Financial Metrics Return On Investment (ROI) = (Gain – Cost) / Cost Net Present Value (NPV) Compares cash inflow to cash outflows Positive NPV – good investment! Internal Rate of Return (IRR) Rate of return over the life of an initiative

Helpful Questions Which option costs the least? Which option is the fastest to implement? Which option has the fewest risks?

Business Case Examples Desktop Support World Campus and Continuing Education Position

Summary Value management is a process that starts with an idea and can go all of the way to an implemented solution. Value management artifacts Idea document – high level overview of an idea/opportunity. Value creation plan – identifies how business value will be created and monitored. Business case – justification for a proposed project.

Wrap Up Questions?