Business Case Report.doc

business case report high technology project virtual reality module month 01 year 2000 copyright 2002 mobipro this document is protected by european copyright law and the law of confidentiality and the comparable laws of other countries. it contains valuable information proprietary to mobipro. no part of this material may be copied, stored or transmitted in any form, electronic or otherwise, without the prior written consent of mobipro. high technology projectvirtual reality modulebusiness case report 55f4bfa770e02a0f2890fcbb78271acb.pdfpage i table of contents 0.notes to author .1 0.1introduction.1 0.2tailoring the template.1 0.3general hints.1 1.overview .2 1.1purpose .2 1.2related documentation.3 1.3related phases .3 2.executive summary.3 2.1background .3 2.2needs summary.3 2.3proposition summary .3 2.4options evaluated .3 2.5method of evaluation.4 2.6the recommended system acquisition/development .5 2.7delivery.5 2.8potential risks.5 2.9impact of not proceeding.5 2.10next action.5 2.11references/appendices.6 3.business overview .6 3.1background .6 3.2need statement.6 3.3need justification .6 3.4references/appendices .6 4.objectives a need to match competitors. example : “there are two major needs behind the project to move office: proposed seminars require larger training room staff growth cannot be accommodated in current office premises” 2.3 proposition summary brief details of the requirements for the system. eg objectives, scope, timeframes, investment, standards etc. example : the requirements of the system are close to public transport client server must be able to issue invoices. has adsl available must link to our existing financial package. etc” 2.4 options evaluated a few lines to outline the options that were examined. if options were not evaluated for any reason, explain why they were excluded. example “the team looked at two scenarios varying the scope, resources, cost and time. 1.development using sofwaredeveloper and 5 developers 2.development using sofwaredeveloper and 8 developers scenarios 1 & 2 will ensure the transfer of softwaredeveloper skills, as well as delivery of the system. scenario 2 shows there is little benefit to adding extra developers. a comparison of the two scenarios is shown in the following table: high technology projectvirtual reality modulebusiness case report 55f4bfa770e02a0f2890fcbb78271acb.pdfpage 4 scenari o scopedeveloper s time (elapsed) cost 1module 1 (2200 fp) 523 weeks287.5k module 2 (2500 fp) 520 weeks250k totals4700 fp543 weeks537.5k 2module 1 (2800 fp) 820 weeks400k module 2 (3200 fp) 815 weeks300k totals6000 fp835 weeks700k both scenarios include the use of softwaredeveloper. using softwaredeveloper for the development ensures softwaredeveloper of quality systems in an incremental manner to fixed timeframes. softwaredeveloper incorporates changes rather than fighting it and because softwaredeveloper is business driven, business will get what it needs at time of delivery. the softwaredeveloper deliverables are also well engineered to satisfy the technical requirements of it. the softwaredeveloper blends the three components of software development, people/process/technology via a framework of techniques to integrate management, business users and it as partners. it manages the process of applications development by using common sense, incorporating change (instead of fighting it), manage expectations through training, provides a transfer of skills and focuses on quality (doing the right thing in the fastest possible time). quality, from the users perspective, is ensuring that the business users get what they need at time of delivery and from the it perspective, is ensuring that the deliverables are well engineered.” 2.5 method of evaluation outline by whom and how the evaluation was carried out. example : “the evaluation was carried out by a team consisting of the following people during june and july this year. john smith - it manager etc” 2.6 the recommended system acquisition/development document the recommendation and give a brief outline of the key issues. eg description, how it fits with business/it plans, costs, benefits example : “after looking at packages available, we recommend in house development for the following reasons. no package has more than a 60% fit with our requirements high technology projectvirtual reality modulebusiness case report 55f4bfa770e02a0f2890fcbb78271acb.pdfpage 5 four of the five packages do not have a client server version. the fifth consists of the lan based version with a screen scraper etc.” 2.7 delivery provide details of the proposed delivery schedule if they are available. example: “the modules will be delivered in the following order: 1.virtual reality 2.reality the plan involves incremental delivery of the above modules to reduce risk and to obtain business benefit as early as possible.” 2.8 potential risks these can be picked up from the risk sub report example : “the following are the main risks. lack of expertise in vb. business requirements are vague. etc.” 2.9 impact of not proceeding what happens if we do nothing. example : “unless we move now, we will not be able to guarantee the system will be modified before the year 2000” 2.10next action the path forward. example : “a meeting will be held next week to discuss the options and agree the development proposal” 2.11references/appendices eg sources, timetable and resources 3. business overview this section in 2 pages maximum expands the information contained in the executive summary. include the following points - 3.1 background example : high technology projectvirtual reality modulebusiness case report 55f4bfa770e02a0f2890fcbb78271acb.pdfpage 6 in 1996, we first looked at modifying the existing system to cope with new products proposed for 1999. the result was a report included as appendix c which recommended.” 3.2 need statement briefly, what is the need being addressed in the report. example : “we need to replace the aging wang system with a windows based system.” 3.3 need justification outline the justification for the need. example : “ the wang hardware, on which the current system runs, is being phased out as a matter of corporate policy. the data maintained by the existing, aging system no longer adequately meets current business needs. none of the modules of the system are integrated which, in many instances, necessitates duplicate data entry. aspects of the system handled manually are no longer manageable for current and growing staff levels.” 3.4 references/appendices eg business plans, surveys, costs, technical environment, etcetera 4. objectives & parameters 4.1 proposal description summarise the proposal, for example, as follows- example : “ to evaluate, select and acquire an efficient, integrated and modular enterprise management system that addresses the needs today of the finance, purchasing, payroll, human resources and engineering business areas, and that incorporates current best practices in these areas. such a system will preferably be a single package-single vendor solution. options such as package use as is, package use with customisation, and in-house development in part will be considered. the case of inaction or do nothing will also be considered.” 4.2 objectives to be achieved state the goals to be achieved clearly. example : “ the primary objective is to satisfy ad-hoc queries, add new data and deliver valued-added information services to clients in a much shorter time frame than is currently the case. the secondary objectives are (list) .” 4.3 target markets list target markets where market entry is enabled or market share is expanded by this proposal. example : “the new functionality will enable the package to be used in new zealand as we will now be able to handle gst.” 4.4 constraints high technology projectvirtual reality modulebusiness case report 55f4bfa770e02a0f2890fcbb78271acb.pdfpage 7 state the limits on the proposal clearly. example : “as we have a major project underway which will take 18 months to complete, we will not have experienced development staff available internally.” 4.4.1 costs state the budgetary limits that apply. eg initial, annual or total cost limits. example : “the budget allocated is $1m with a payback period that must not exceed 2 years.” 4.4.2 timeframe state the time limits that apply. example : “implementation of core systems on or before 1997 financial year implementation in full by latest 1998 march quarter. “ 4.4.3 investment state any investment criteria that apply, for example- example : “maximum payback period of three years minimum internal rate of return of 15%.” 4.4.4 standards state any business or technical standards where conformity is required - example : “financial systems conform to australian g.a.a.p. practices accounting packages conform to nsw government g.s.a.s. recommendations technical platform conform to corporate it &t standards (list) . “ 4.4.5 other state any other constraints that apply, for example- example : “no protracted run-off of legacy systems beyond two months duration. policy is to implement packaged solutions rather than to develop systems.” 4.5 infrastructure investment required summarise the size of any prerequisite investment required. example : “a high initial investment in data, software, hardware, staff, training or management will be required to create the infrastructure needed for the project. substantial changes in it & t service delivery will be required in several areas. these are (list) . high technology projectvirtual reality modulebusiness case report 55f4bfa770e02a0f2890fcbb78271acb.pdfpage 8 a medium-to-small initial investment in data, software, hardware, staff, training or management will be required to create the infrastructure needed for the project. minor changes in it & t service delivery will be required. these are (list) . the proposal uses existing it & t services and facilities. no investment in infrastructure is required.” 4.6 class of investment project classify the nature of the investment project. example : “must do investment eg compliance with legislation, statutes, regulations, or replacement of obsolete, costly high-risk systems. core business investment eg. development or extension of products and services, opening of new channel of distribution like telemarketing, automation of operations. it infrastructure/services investment eg. upgrade of aging printers & terminals to cut maintenance costs, linking with electronic commerce networks, or consolidation of systems. prestige project investment eg. move to prestige address, joint venture in high profile technology or support of a multi-media event. research & development investment eg. tax-effective investment in document management systems for existing clients, the local market and exports. other eg. change or consolidation of offices to cut rental & manpower costs but requiring one-off refurbishment and rewiring costs.” note that a project may have several facets eg. core business and it infrastructure investment. refer to pertinent sections of corporate plans and strategies. 5. scope of proposal 5.1 scope inclusions state clearly what is included in this proposal. example : “the proposal includes all database changes required to avoid year 2000 problems.” 5.2 scope exclusions state clearly what is excluded from this proposal, adding any provisos or assumptions necessary. example : “the implementation of automated workflow is desirable but not included initially. however, proposed systems must have the inherent capacity to provide automated workflow.” 5.3 assumptions & provisos high technology projectvirtual reality modulebusiness case report 55f4bfa770e02a0f2890fcbb78271acb.pdfpage 9 list any assumptions or un-verified facts relating to the project. example : “ the proposal is based on the assumption that we will be able to find a package that is an 80% fit with our requirements.” 6. alternatives 6.1 option 1 do nothing it is always a wise decision to start with the option of inaction. it will give an indication of the urgency of the situation and prompt action. 6.1.1 overview this option applies if no action is taken, or business case recommendations are rejected, or recommendations are accepted but action deferred. example : “if no action is taken within the next two months it is highly likely we will be unable to comply with recent insurance industry legislation. the implications of this non- compliance are that we may have our accreditation withdrawn.” 6.1.2 approach normally we would talk about how the option would be implemented. as there is no action to be taken, there is no approach. 6.1.3 pros & cons advantages there may or may not be advantages to this option. example : “by taking no action we will defer the cost of upgrading our network for at least another year.” disadvantages by not doing anything, there are obviously disadvantages. example : “ disadvantage is that current information systems problems will worsen.” 6.1.4 risks much of this information comes from the risks sub report. it should be categorised into high, medium and low risks. example : “high risk funds sunk to date in the purchase, customisation and enhancement of the current system are at risk because the vendor is quitting the market, the technology is obsolete or apt technical support is increasingly scarce. it is evident that the system has no upgrade path and its continuity is at risk.” 6.1.5 costs much of this information comes from the costs sub report. it should be summarised down to a few lines as the detail is in the sub report. the sub report gives the “how” the costs were derived. this section gives the “what” in a few lines. totals should be included for each section. high technology projectvirtual reality modulebusiness case report 55f4bfa770e02a0f2890fcbb78271acb.pdfpage 10 pre-implementation costs what needs to be spent prior to an implementation. in this case, nothing. capital costs costs to be incurred in capital equipment. once again, only a few lines. the detail is in the sub report. if the option is to do nothing, there is probably no cost. customisation/development costs if customisation is required, what will it cost. implementation costs the costs associated with acceptance testing, training and implementing the solution. fixed operating costs what were identified as direct operating costs in the sub report. example : “if we do nothing the existing system costs will remain constant. for the next three years, they are as follows: year 1$60,000 year 2$65,000 year 3$70,000” variable operating costs the variable costs associated with running the new system. these will have been detailed in the sub report. if there are points which should be explained, they should be done briefly. example : “by doing nothing the variable costs will remain on a par with the current expenditure. year 1$21,000 year 2$46,000 (includes $20,000 for the new interface to the xyz system) year 3$25,000” indirect project costs a listing of the costs indirectly generated by the development. it should be noted whether these are costs as a consequence of the proposal, or are costs that would have been generated anyway and may have been brought forward. there are probably no indirect project costs if the option is to do nothing. opportunity costs there are usually some opportunity costs which may be hard to quantify. as these are usually not quantifiable, they are not included in the sub report. examples : “ inability to improve the level of service or increase the scope of service to clients. savings planned via new initiatives are not made.” “cost of errors, rework and lack of reconciliation. likelihood that work procedures become increasingly inefficient and inaccurate.” high technology projectvirtual reality modulebusiness case r