Fund Innovation with a Minimum Viable Business Case Sample

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Fund Innovation with a Minimum Viable Business Case Sample
V4
Fund Innovation with a Minimum Viable
Business Case
Full business cases are for scaling, not for starting.
Info-Tech Research Group, Inc. is a global leader in providing IT research and advice.
Info-Tech’s products and services combine actionable insight and relevant advice with
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and services
combine
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insight
with ready-to-use tools
ready-to-use
tools and
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that cover
theand
full relevant
spectrumadvice
of IT concerns.
and templates that cover the full spectrum©of
IT concerns.©
1997 Research
- 2016 Info-Tech
Research Group
1997-2016
Info-Tech
Group Inc.
Info-Tech Research Group
1
ANALYST PERSPECTIVE
Smaller is almost always better.
Ask yourself these questions:
•
Am I making IT investment decisions based on inaccurate data?
•
Am I overly speculative about the benefits of any particular IT solution?
•
Are my business cases being taken seriously?
•
How much time have I wasted on business cases that were rejected?
•
How long before the business is fed up with all of this?
Starting small and then scaling up once you have configured your solution
accurately will help you achieve a project’s benefits faster than going big bang.
This approach will also help you build and maintain your credibility as a
business leader.
Measure twice, cut once.
David Glazer
CIO Practice
Info-Tech Research Group
Info-Tech Research Group
2
Executive summary
Situation
• To truly be viewed as a strategic leader in the eyes of the business units,
•
the CIO must be prepared to spot opportunities for organizational growth
and build the case to actually make it happen.
The business case is still the primary vehicle to gain the necessary
support and resources from the business to execute on IT projects.
Complication
• Most IT projects are not delivering on their expected value because the
•
costs and benefits of technology solutions are often difficult to predict.
Innovation projects are inherently less certain than “business as usual”
projects, and therefore, benefits and costs are harder to predict.
o This hurts IT’s chances of contributing to organizational growth as the
business is already averse to IT spending due to uncertainty of
benefit.
Info-Tech Insight
Full business cases are for
scaling, not starting.
• Even if you think you are certain of a
project’s benefits, or the
desired/necessary functionality, you are
probably wrong (in fact, there’s a 70%
chance that you are wrong).
• Take the minimum viable approach to
start ALL projects to improve your speed
to market, speed to scale, and speed to
benefit.
Source: California Management Review (2007)
Resolution
• The IT department needs a structured approach to building the case for projects that not only helps the project get funding,
•
but realize benefits as well.
Our approach guides the effective design of a solution, de-risking a project through impact reduction techniques, building &
pitching the case for your project, and applying the business case as a mechanism to ensure that benefits are realized.
Info-Tech Research Group
3
Our understanding of the problem
This Research is
Is Designed For:
This Research Will Help You:
 CIO
 Director of IT
 Chief Innovation Officer
 Business Unit Heads
 Get the necessary support and resources from
the business to formally start your project.
 Communicate the value of your project in a
concise manner.
 Plan your project in a way that reduces time to
market, resource needs and scope, and helps
realize benefits.
This Research Will Also
Assist:
Assist:
This Research Will Help You:
Them:
 VP of the PMO
 Enterprise Architect
 CTO
 Chief Digital Officer
 Innovation Lead
 Filter ideas coming from the innovation team.
 De-risk the innovative project by gathering the
necessary information and data to make more
informed strategic decisions.
Info-Tech Research Group
4
Most projects are not delivering on their expected benefits
40%
of IT professionals believe their
current approach leads them to
overstate benefits.
70%
of IT professionals believe that
they do not adequately quantify
benefits in business cases.
Only 30% of business cases for IT investment
deliver on their expected benefit.
96%
of IT investments require a
business case.
68%
of IT professionals view
developing a business case as
important.
Source: “Building Better Business Cases for IT Investments,” California
Management Review (2007)
Info-Tech Research Group
5
A better approach is needed if IT is going to help the
organization grow
According to McKinsey & Co., more than 60% of CEOs are expecting upwards of half their earnings
growth to come from technology-enabled business innovations over the next five years.
Technological Uncertainty
New IoT
Product
Advanced R&D
Tech Breakthrough
New Platform
New Product
New
Smartphone
App
New
Telecom
Service
Marginal Improvement
Known
Market
Unknown
Existing Market
Market
Creation
Stable
Changing
Market
Uncertainty
Effervescent
Context Dynamism
Source: S. Floricel, “Innovation Projects Lifecycle”
Info-Tech Research Group
6
Introducing the minimum viable business case approach
For years, cash-strained start-ups have been applying a leaner approach to bring solutions to
market that involve testing to validate assumptions, and failing fast and cheap, through the delivery
of a minimum viable product. Info-Tech suggests a similar approach for a broader organizational
context, where resources are increasingly constrained and unfortunately, benefits often go
unrealized.
Follow Info-Tech’s minimum viable business case (MVBC) methodology to secure the resources for
IT investments in a way that promotes the effective tracking and realization of benefits.
1
Create a Solution to Someone’s Problem
This phase helps you design an effective value proposition for the solution you intend to develop.
2
Reduce the Impact of Your Project
3
Build the Case and Secure Approval
4
Implement, Measure, and Scale
Phase two provides you with the tools necessary to reduce your project impact (time, resources,
scope), and thus better manage the risks associated with uncertainty.
Phase three will walk you through the steps necessary to get support for your project.
Once you’ve received project approval, it is time to implement. Phase four helps you ensure that
you get the most out of this approach.
Info-Tech Research Group
7
Full business cases are for scaling, not starting
Innovation projects are different;
they have higher uncertainty and
thus the current frameworks and
evaluative criteria do not apply.
Conventional Wisdom
Business cases must be standardized across
an organization so that projects can be
evaluated on the same criteria.
An expedited format for creating a
business case can help you get
your ideas to market FASTER.
There are two steps to scaling an innovative
project. Step one is your minimum viable business
case, which helps you decrease the impact. The
second step is the full business case, which helps
you scale.
Transformational Thinking
Full business cases are for scaling, not starting. Even if you think you are certain of a project’s benefits or the
desired/necessary functionality, you are probably wrong (in fact, there’s a 70% chance that you are wrong). Take the
minimum viable approach to start ALL projects. This will improve your speed to market, speed to scale, and speed to benefit.
Info-Tech Research Group
8
Don’t overburden yourself with work before you get started
Work smart to build the business case for a technology solution by basing financial benefit projections on real information
collected by testing the solution at a small scale in your organization first. Once you have collected the necessary
information from running your initial project, proceed to build out the rest of the full business case, if you determine that it
is a good idea to scale the project more broadly based on the data.
Elements of a Minimum Viable Business Case:

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
Value proposition
Vision
Cost estimate
Expected benefits
Implementation plan
Elements of a Full Business Case:






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
Forward/introduction
External trends/forces
Background
System/process assessment
Cost of problem
System requirements
Deployment options
Cost estimate on a 3-5 year horizon
Anticipated ROI
Quantified savings/revenue

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Process review diagrams
List of key challenges
Connection to strategic goals
Vendor selection process
Subject-matter strategy best practices
Justification/decision criteria (rubric)
Current vs. proposed technology environment
Dependencies
Capability readiness assessment
Info-Tech Research Group
9
Info-Tech Research Group Helps IT Professionals To:



Quickly get up to speed
with new technologies

Manage business expectations

Justify IT spending and
prove the value of IT

Train IT staff and effectively
manage an IT department
Make the right technology
purchasing decisions – fast
Deliver critical IT
projects, on time and
within budget
Sign up for free trial membership to get practical
solutions for your IT challenges
“Info-Tech helps me to be proactive instead of reactive –
a cardinal rule in a stable and leading edge IT environment.
•
- ARCS Commercial Mortgage Co., LP
Toll Free: 1-888-670-8889
Info-Tech Research Group
www.infotech.com
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