Making the Business Decision Business Case Approach to Demonstrate Value Suhas Uppalapati Director...
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Making the Business Decision Making the Business Decision Business Case Approach to Demonstrate Business Case Approach to Demonstrate Value Value Suhas Uppalapati Suhas Uppalapati Director – Statewide IT Planning Director – Statewide IT Planning Georgia Technology Authority Georgia Technology Authority October 12, 2007 October 12, 2007
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Making the Business Decision Making the Business Decision
Business Case Approach to Demonstrate ValueBusiness Case Approach to Demonstrate Value
Suhas UppalapatiSuhas UppalapatiDirector – Statewide IT PlanningDirector – Statewide IT PlanningGeorgia Technology AuthorityGeorgia Technology Authority
October 12, 2007October 12, 2007
Georgia Technology Authority
A Business Case answers:A Business Case answers:
What is the right thing?
Is the proposed investment:
• In line with the vision?• Consistent with the business principles?• Contributing to objectives?• Providing optimal value, at affordable cost, at an acceptable level of risk?
What is the Value?
Is there:
• A clear and shared understanding of the expected benefits?• Clear accountability for realizing the benefits?
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A. Introduction
E. Recommendations & Conclusions
D. Risks & Sensitivity
C. Projections
B. Thesis
Building a Business Case
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A. IntroductionA. IntroductionA. IntroductionA. Introduction
Proposed actions that support
business objectives that results in
measurable goals but possibly bounded by
specific constraints with value exposed by selected
models.
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Cost Models – NPV Approach
Option-1 Option-2
Year 1 $1,000,000 $1,800,000
Year 2 $1,200,000 $1,600,000
Year 3 $1,400,000 $1,400,000
Year 4 $1,600,000 $1,200,000
Year 5 $1,800,000 $900,000
Total $7,000,000 $6,900,000
Georgia Technology Authority
Cost Models – NPV Approach
Option-1 Option-2
Year 1 $1,000,000 $1,800,000
Year 2 $1,200,000 $1,600,000
Year 3 $1,400,000 $1,400,000
Year 4 $1,600,000 $1,200,000
Year 5 $1,800,000 $900,000
Total $7,000,000 $6,900,000
Net Present Value
Option-1 Option-2
Year 1 $1,000,000 $1,800,000
Year 2 $1,142,000 $1,523,000
Year 3 $1,269,000 $1,269,000
Year 4 $1,382,000 $1,036,000
Year 5 $1,480,000 $740,000
NPV - Total $6,273,000 $6,368,000
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B. ThesisB. Thesis
Defines problem bounded by
conditions, explained through
scenarios that introduce
assumptions, drivers & data sources that support a
benefits analysis
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Analysis: TCO
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Analysis: Cost Vs. Performance
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Benefits AnalysisBenefits Analysis
Public Sector Objectives are not all about Systems!
Strategic Results
Objectives/Tactics
Systems
Focus of business cases that win
Focus of business cases that fail
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C. ProjectionsC. Projections
Public Sector Objectives are not all about finances !
Value is paramount !!!
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Complement TCO w/ Public Value of IT
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D. Risks & SensitivityD. Risks & Sensitivity
SENSITIVITY ANALYSIS
RISK ANALYSIS
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D. Risks & Sensitivity
E. Recommendations & ConclusionsE. Recommendations & Conclusions
Based on the business case analysis presented here, we recommend ……
Georgia Technology Authority
A. Introduction
E. Recommendations & Conclusions
D. Risks & Sensitivity
C. Projections
B. Thesis
Building a Business Case
Georgia Technology Authority
