It's easy to get the owner of my small business to buy IT if there's a
defined need for it -- antivirus, auditing tools, whatever. What about the stuff that I'd like to
try out but can't identify an immediate, near-term or probable need for? I'm referring to things I
have a gut feeling that I'd find it useful if I could just get hold of it for longer than an
evaluation period that I'd probably miss anyway. The latest example was VMWare Workstation. I have
a feeling that multiple virtual PCs will allow me to be more productive, but I can't wave that
under my manager's nose.
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Margie Semilof, Editorial Director
Any solution worth investing in will typically help the business drive revenue, improve
productivity or save money. The key to any initiative you want others to consider for approval is
to verify the benefits and then document the value of the solution compared to its costs to the
organization. A simple business case would consist of the following topics covered to provide the
executive with the business criteria they need to make sure the decision is well-founded and can
deliver value.
- Purpose of project -- name of project and the scope of coverage; users who would use the
project
- Business goal -- such as improving productivity of particular users or groups
- Benefits of project
- Improve productivity -- how many hours it can save in a day; multiply the number of users who can benefit from it by the burdened user rate to quantify the productivity gain in dollars and cents.
- Reduced/avoided costs -- how much current costs such as support and service fees or future costs such as anticipated system upgrades or purchases can be avoided with the proposed solution
- Additional revenue opportunities -- additional customers, increased transaction price, increased number of transactions that the solution can generate
- Costs of project
- Costs for hardware and software
Ongoing maintenance and support costs - Training costs
- Costs for hardware and software
- ROI calculation -- over a typical three-year period, the ratio of net benefits (calculated as
total benefits less total costs) divided by total costs, expressed as a percentage
- Additional intangible (non-quantifiable strategic) benefits of implementing the solution
- Risks, if any, of implementing the project -- including chances for cost or schedule overruns or not realizing key benefits such as poor adoption
This was first published in December 2005