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System Integrators

How to build a business case

Achieve that go/no-go decision and avoid killing a project before it begins

By Ryan Courtney December 13, 2020
Courtesy: Matrix Technologies Inc.

Problems are the driving force behind projects that demand business solutions. Company leadership recognizes this need and relies heavily on cross-functional teams to study feasibility and determine if a business case can be developed (see Figure 1). Management uses a business case to quantitatively and qualitatively determine the economic feasibility of an effort currently lacking in definition. The business case is a key input to the project charter and will be a living document throughout the life of the project that serves as a litmus test against the project objectives.

Within the initiation phase of any project, one needs to consider four fundamental components to business case development: business needs, situational analysis, recommendation and evaluation.

Determine business needs

Determining business needs is an important first step in the process of developing a solid business case. Accomplish this by assessing needs, identifying stakeholders and identifying scope.

A needs assessment is a data collection process that identifies business needs versus wants and corresponds to the gaps between the current situation and the desired outcome. This manner of data collection involves understanding regulatory requirements, surveying stakeholders and analyzing historical data, as well as an important component of conducting a voice of the customer.

Figure 1: Establishing cross-function teams and early stakeholder engagement is the cornerstone of business case development. Courtesy: Matrix Technologies Inc.

Figure 1: Establishing cross-function teams and early stakeholder engagement is the cornerstone of business case development. Courtesy: Matrix Technologies Inc.

Stakeholder identification is a process in which you engage all key decision-making personnel to collaborate on determining the business need. Stakeholders often represent operations, maintenance, engineering, procurement and environmental health and safety, in addition to a representative or champion from the steering committee or leadership. The challenge in stakeholder identification is ensuring all key personnel are appropriately represented and engaged early on. Failing to involve all the proper stakeholders early in initiation can lead to oversights and misalignments later in the project effort.

Identify scope by determining what work is required to achieve the desired business outcome or objective. Scope identification relies heavily on stakeholder identification to make certain there is early alignment with the business functions the project effort will impact.

Analyze the situation

Situational analysis is important to recognize the organization’s objectives, goals and strategies. Determine the root cause(s) of the problem or the conditions to leverage in the case of an opportunity. Consider conducting a gap analysis on the identified business need versus the current organizational capabilities. Discuss and capture the known risks, which may be high level at this point in the process, and highlight factors critical to success of the effort, especially those quick wins and low-hanging fruit. Determine the decision-making criteria you will use to assess the course of action through the life of the project effort.

Through situational analysis, classify identified components as being required, desired or optional. This further qualifies needs versus wants and is essential to the objectivity of the business case. Take the time during situational analysis to identify options. This assures business leadership you have considered and vetted all avenues to determine the best course of action relative to an investment. Further classify options as doing nothing, doing the minimum or going beyond the minimum to address the problem or opportunity.

Recommend options

The recommendation section of the business case is often synonymous with the conclusion. It states to the business the most feasible option to progress with. A recommendation of an option includes a summary of the results compiled in addition to the risks, assumptions, constraints and interdependencies associated with the chosen option.

The recommendation should highlight the success criteria used to measure the outcome of the option pursued. Depending upon the nature of the business case and organizational requirements, consider including high level milestone schedule as well as a RACI (responsible/accountable/consulted/informed) chart accentuating roles and responsibilities as part of the recommendation.

Evaluate the success

Finally, consider the evaluation part of the business case. The evaluation section determines the measure of success during the course of the project effort, handoff between project and operations, as well as the operational impacts beyond implementation. In essence, this statement and supporting information outlines how you will measure the long- and short-term benefits of the project deliverables.

The common scenario

Consider the scenario that often plays out where a client wishes to undertake a reliability improvement effort that is part obsolescence mitigation, part automation and part digitalization. Most engineers want to execute this effort in an all-in fashion where every programmable logic controller (PLC) in the facility is upgraded to the latest and greatest version available. Let’s refer to this as the do-more-than expected scenario mentioned previously, often dubbed the Cadillac scenario. Of course, there is the do-nothing option mentioned above, which is always an option albeit less preferred by personnel in the trenches who are close to the process equipment.

Finally, there is the middle-of-the-road scenario in which you do only what is necessary. This scenario is where the rubber meets the road when preparing a business case. This option requires the ultimate effort in due diligence, where you evaluate each piece of equipment and score it to determine if upgrading is a want versus a need.

Perhaps the outcome of this exercise is engineering determines some of these processors do not need to be upgraded, or do not need to be processors at all. They may find that all along, there is ample memory and processing speed in a PLC in proximity to this piece of equipment that was unknowingly upgraded recently, and any rack in a given area of concentricity can be upgraded to a remote input/output (I/O) rack using more of a distributed methodology.

This endeavor is the quintessential compromise in preparing a business case where engineering gets the upgraded hardware and leadership gets the best cost solution. What can be aggregated from this scenario is more of a program approach where the investment can be spread across fiscal calendars over a period of years rather than a lump sum capital expenditure in a single year. By capturing the full complement of these scenarios, leadership receives the whole narrative and assurance the team preparing the business case has put pencil to paper, leaving no stone unturned.

Figure 2: Presenting a concise and data driven business case demonstrates due diligence to company leadership. Courtesy: Matrix Technologies Inc.

Figure 2: Presenting a concise and data driven business case demonstrates due diligence to company leadership. Courtesy: Matrix Technologies Inc.

Final thoughts

By following the steps identified above, your team can ensure you have performed due diligence in developing a business case. Moreover, your company’s leadership can be assured the business case is objective in nature, watertight and aligns with their organizational goals, objectives and strategies.

The more objective, concise and data driven the business case is, the more efficient the process will be to determining the payback of an investment, whether it be return on investment, net present value or other financial efficiency metric (see Figure 2). The culmination of these components in a solid business case will allow for leadership to render an effective “go/no-go” decision.

Matrix Technologies Inc. is a certified member of the Control System Integrators Association (CSIA). The company received the 2020 System Integrator of the Year Award.


Ryan Courtney
Author Bio: Ryan Courtney, MEM, PMP, is project manager in the PM division of Matrix Technologies Inc. He is responsible for successful completion of projects across various divisions within the corporation from initiation to closure. With extensive background across industries, he has implemented many successful projects globally, as client and consultant in Electrical Engineering and Project Management roles. He joined Matrix in 2018.