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Guide to Create Business Case using Cost Benefit Analysis

Guide to Create Business Case using Cost Benefit Analysis

A strong business case for a CMDB must comprise of the following elements:
 
  • Solution Summary
  • Goals and benefits
  • Cost benefit analysis
 
Solution summary
 
Review your results from gaining CMDB knowledge to describing the projected benefits. You haven’t yet created a comprehensive list of requests or selected particular technologies, but you should review the functional components you might need. The solution summary might include:
 
  • Solution outline — Provide a brief explanation of the projected CMDB solution, define the IT services and processes that will be developed by the CMDB, and pin-point the business process modifications that will be mandatory
  • Cost estimates — Describe the projected costs to deploy the project, including forthcoming requirements for new or changed processes in other divisions
  • Alternatives considered — Quickly outline the other resolutions you considered and the crucial point for which you did not endorse them
 
You should consider and present a minimum of 3 situations or options to add reliability:
 
Do nothing, sustain current state. Generally at times it is less expensive to not resolve a problem, particularly if the price of the solution is more than the projected benefits.
 
The suggested solution.
 
A 2nd alternative, such as increasing the function of a current solution — an asset management repository, for instance. It is vital to show that present systems were considered and if not, why.
 
  • Project timeline — The timeline defines the crucial benchmarks and phases of the project. Although you will still need to describe some features of the project plan, presenting the projected time frames will set project prospects correctly
  • Risk analysis — List your expectations. As each assessment of expense or benefits in the business case will be based on a set of considerations, you should present these considerations and record their possible effect on budget or benefit assessments. For instance, if incorporation is more challenging than anticipated, it could upsurge costs by 5%
Goals and benefits
 
In this segment, you can include an overview of the objectives and task you designed and the projected benefits and effect you produced. If the project can justify certain performance enhancements, everyone affected by the project should clearly know the business case and commit to the objectives so that the project attains the projected ROI. For each anticipated benefit and effect, list the following:
 
  • Specific metric — Change rate of success, for instance
  • Description of that metric — Total number of effective changes divided by total number of scheduled changes
  • Current measure — For instance, 80%
  • Goal after implementation — For instance, 90%
 
While you can take account of metrics in both the existing problem and planned solution segments of the business case, combining them here guarantees agreement on the objectives of the project.
 
Cost benefit analysis
 
Review the projected project costs and the projected investments related with the benefits. You have not yet described all of the requests or the broad range of solutions, so you can’t have exact budgetary assessments. However, you do need cost assessments of the project to weigh against the projected benefits.
 
If the solution will save 1 million dollars in enhanced IT process productivity, but will cost 2 million dollars to deploy, then you have a problem. However, if you present projected costs that are realistic in contrast to the likely benefits, then you can make a solid case for moving forward with the project.

Author : Arunavo Banerjee

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