Shaky Spreadsheets: Making the Business Case Believable
Pity the business case. It’s only prepared around half the time (according to a KPMG Project Management Survey), and when presented, only 40 percent of cases are believed (according to PA Management Consultants). What has caused this blight on the key tool to justify and manage IT investments?
Make an investment case, not claims
The first cause is the abuse of the business case as a sales tool. Instead of a due diligence on an investment opportunity, business cases often deteriorate into pitch-and-forget sales tools. Treating the business case as a true case--not a set of claims--crafted with the rigor of a lawyer preparing for court is the way to distinction for any technology vendor.
High tech, low finance
Next, though business cases justify investments in high tech, the financial techniques used are distinctly low finance. As technology accounts for half of all corporate capital expenditure, you would expect the best, most-proven financial techniques would apply.
Instead, simplistic measures such as payback and return on investment are preferred. A CIO Insight survey at the beginning of the year found time to payback was most popular, and despite a 70-year history and daily use across the financial world, discounted cash flow failed to make the top five. Similarly, the popularity of standardized cross-industry ROI calculators is peculiar, given …
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