4.2. Business case
The business case process determines whether the organisation should adopt system governance.
If the organisation does decide to adopt system governance, the business case identifies the specific drivers for system governance, which will guide its implementation and use.
The business case is used when the organisation is considering whether to adopt system governance.
The process is carried out by the IT decision makers. One of these is likely to be, or to become, the system governance sponsor, but this business case process does not distinguish this role at this stage. If a sponsor has been identified at this early stage, then they would naturally lead this process.
Different organisations have very different decision-making processes, and the process for agreeing to adopt system governance will depend on an organisation's situation and preferences. The steps in this process illustrate a progression of ideas that help explore the case for system governance, but will need to be tailored to the organisation's needs.
Identify drivers
- Responsible:
- IT decision makers
- Involved:
- none
Consider how system governance could contribute to the objectives and priorities of the IT organisation. See Strategic uses for a summary of the main ways in which system governance could help.
If appropriate, arrange overview training in system governance for the IT decision makers. See Section D.1, System governance overview.
Consider the drivers for system governance.
- Is there an enforced requirement for compliance? System governance is an efficient framework for encouraging and demonstrating compliance.
- Are there pressing quality, standards or monitoring issues? System governance provides an effective framework for managing these.
- Could cost savings be envisaged? System governance identifies where cost-saving investments could be made, and monitors up take of the changes to ensure the return is achieved.
Be specific about the desired outcome and where appropriate quantify it.
Consider specific priorities for your organisation, rather than the general case. Over time, system governance can meet a broad set of needs in the organisation, but it is best to initially focus on the areas of greatest need.
System governance does not work in isolation. Consider what management processes system governance would have to fit in with.
- If system governance will help with cost reduction, what work planning processes should it feed into?
- If it will help enforce standards, what authority will it have to force work on projects and systems?
- If it will be used to monitor outsourcing, how does this fit with the outsourcing contracts?
If you can not envisage using the outputs from system governance, there is little point in adopting it.
Define business case
- Responsible:
- IT decision makers
- Involved:
- none
Weigh up the costs and benefits of system governance.
When considering the costs and benefits of system governance, distinguish between the benefit of the guidance that system governance provides, and the cost and benefit of the action that the guidance then prompts. System governance might show you where a £50,000 investment will save £150,000 per year, but there is no simple way to identify the return as a benefit of system governance or the benefit of the £50,000 investment. System governance does not save money directly; it shows how to save money. Consider the case carefully.
The costs of system governance are relatively modest. Most of the costs are the staff (or service provider) costs associated with carrying out assessments. These are higher in the first year, especially if systems are largely undocumented or unknown, and reduce significantly in year two and subsequent years. (As a rule of thumb, consider three days staff costs per system in year one, and one day per system thereafter.)
The costs of system governance are likely to be largely offset by its tangible cost savings, and in many cases system governance will pay for itself in these alone.
Document the drivers and the business case, and make recommendations.
Gain agreement
- Responsible:
- IT decision makers
- Involved:
- none
Discuss and agree the business case between the IT decision makers, and gain an agreement to proceed.
Allocate budget for system governance.
Identify an effective sponsor for system governance.