end of the whiteboard

WELCOME TO THE BUSINESS CASE REVOLUTION

“Change is the only constant in life” – Heraclitus

In life, change is inevitable; in business, change is vital 70% of change projects fail

It’s just a Bad Business (Case)

Organisations struggle to overcome the hurdles preventing successful business transformation. There are many contributors that create significant pain when change is on the table;

  • a lack of data-driven insights
  • facts rather than opinion,
  • complex processes which have evolved organically,
  • business landscapes preventing change nimbleness, and
  • a failure to understand the true value created by people, systems, processes and technology.

The costly process of business case writing, undertaken multiple times a year, to bring together the evidence required to support decisions which inevitably includes spending money, is a necessary evil in both the Public and Private sector.

Business cases fail through flaws in the process itself, accentuated by the poor toolset available to the writers of these cases. Whilst technology is making all aspects of life easier and more efficient, the change enablement aspects of running a business remains in the dark ages, almost forgotten. Teams struggle to use office style tools and are forced to write content which few people care to read, let alone understand.

There has been little or no change in this space for the past 20 years. Perhaps white boards are smarter, the phones are faster, but the paper is still brown and thankfully the PostIt™ notes now come in many colours making classification of ideas easier.

In a world that has rapidly become more technical, this fundamental business process remains analogue at best.

Today’s approaches to business case development often leave key questions unanswered:

  • How do I operate today and how should I operate tomorrow?
  • How does my business create value? Where should I invest to maximise value from the work I do?
  • How will I communicate the change necessary to my decision makers who are not technically minded; they want a business conversation?
  • How do I ensure my decision-making is data-driven and not led by others’ bias to a “gut-feel” solution?
  • How do I ensure today’s change meets the demands of tomorrow’s customers whilst preventing myself from being backed into a corner?

These are fundamental questions about the DNA of a business; and to answer them, we need to be able to understand where we are and how we operate, and how this is aligned with our ambitions for tomorrow.

The current decision cycle process for any change, which is built around creating a business case to be signed off by someone in the Executive, is broken, expensive, ineffective, supported with inadequate tools, and is not well-liked by the people doing the work or by anyone involved in the process.

A typical decision cycle followed in many organisations today

Typical business case process

The unique element within LINQ is the application of the value lens across the business.

“By understanding the value of the information outputs you rely on to create and deliver business value, you quickly understand the value of everything required to enable that value; people, systems, processes and data.”

Value is the key attribute which can help us squash the decision timeline and get to the point that you are; implementing the right change, in the best possible way, fully communicated to the organisation, and with the ability to measure the end result so we can adjust as necessary (then rinse and repeat).

In a recent presentation by Terry Roach of Capsifi, Terry asked:

“What is to the left of Strategy, if tactics and operations are right of Strategy?” , and gave the answer as “Value”.

Understanding organisational value and the elements of the business which contribute to and indeed create that value, is a game changer.

When you utilise value early on in your change conversations, the decision cycle looks something like this:

The new decision cycle using LINQ to accelerate decision making

How to Ensure Success

Making the Current State valuable

A business change programme must start with the “As Is” capture!

Although this is typically avoided, deemed to be too difficult and to take too long, LINQ has it covered.

Users of LINQ consistently provide feedback that the approach to this type of capture is ten times faster than other approaches.

LINQ recently had the pleasure of working with a Utilities customer in the US. In less than eight hours they captured the core model of how they take one of their products to market, enabling the next set of SME (subject matter expert) conversations to be very focused to ensure assumptions were corrected and financials captured.

The feedback from the Executive at the time was that this process usually took many weeks to complete.

The more complex your process, the more time it will take, that is true across any technique used to capture current state. Knowing you are likely to be 10 times faster than usual is a huge motivator. Knowing where you are today, to an appropriate level of detail, means that you can now accurately decide where you want to get to, all aligned with your strategic business goals.

LINQ applies value to the model very early on in the process.

As this is not well understood today, there is a journey to go on to get to an explicit value score; through level of importance, to considering your perspective of value, to utilising an economic model for the value of information from Gartner for example.

The principles of Infonomics; the management, measurement and monetisation of information, are built  on the foundation that information should be managed as an asset and that it is an asset which drives business value. Doug Laney, Gartner VP and Distinguished Analyst published the book, “ Infonomics” in early 2018. If you haven’t read this, I highly recommend that you do.

Wherever you start from, having value flow through your current state means that prioritisation happens early in the discussion. You solve issues that you find in areas of high value before you look elsewhere.

Once you understand what you are solving, you can build a model which shows the future state(s), the “to be” where the challenges have been removed.

Generically we call these challenges information waste; things which ultimately impact the value of the information you need to be successful. This can range from having repetitive processes performed by people, activities involving information rework (fixing mistakes), delays in making information available to the next part of the process, information being used in a less than useful format, or lots of paper involved in the information flow, to name a few.

As LINQ also helps you to understand cost through the process; the cost of people performing actions is allocated to the ultimate outcome produced by the work done, so when you put current and future stateside by side, you can instantly see the impact of the change. You’re so close to having your business case ready to go!

How you measure benefit?

If we briefly jump to the end of the decision process, without “As Is” the opportunity to measure results and understand benefits realisation is impossible.

 

You cannot make accurate statements about the success of the change you have implemented, if you cannot reference how things were before you made the change.

How then do you justify the next change, learn from success or failure, or prove to the decision maker who said “yes” that they made the correct decision?

Most organisations jump straight into designing their future state, the “to be”, as this is exciting – it’s creative and innovative. IT may take the lead and apply systems centric approach, so the “as is” will more than likely rely on a new system to solve some perceived challenge and this will be the basis of the future.

Change is never about the technology. Today technology is easy and overall most things that you can think or dream of can be solved by technology. Change is about people, and people dislike change.

So, the real challenge that should be overcome is how to build the cultural cohesion within the business, so that people become the enablers of change instead of barriers to change.

The business case in discussion reflects what we would like to do, rather than what perhaps we should do, to solve a business need.

The drivers for the change may be blurred. Perhaps personal agendas are at play, protecting boundaries of control or influence, rather than considering the benefit to the business; to make it more efficient and effective and respond to the needs of the customer?

Our financials are based on the cost of implementation – we may have very little content addressing the impact or value of the change, financially or otherwise.

If we have several change possibilities that we are looking at, we prioritise based on the conversation at the appropriate level – perhaps here we try to align to corporate goals?

Value to the business is unlikely to have been part of the conversation to date so is also unlikely to feature in the prioritisation conversation.

When we come to implementation, it’s done with fingers, and possibly toes, firmly crossed. There is a stress to the work, everyone focused on ensuring nothing goes wrong; have we considered everything, did we catch all of the people using the current systems, have we understood the requirements correctly. This isn’t really the time to be asking those questions!

Research suggests that 70% of change projects fail. They either fail to meet the expectations set in the business case, or they are abandoned within 3 years.

Scope creep is one of the principle reasons;

  • more systems needed integrating with,
  • the information requirement to enable the ultimate outcome we had to protect through the change wasn’t well understood,
  • people were resistant due to poor

 

So the project size went up and up and eventually the call had to be made to stop. Or the project is de-scoped to a size that means it can be successful, but not deliver what the business needed.

project failure rates
“Back to the Future” State - so how much will it cost?

With the models you have created in LINQ, you have quickly understood the cost and value of both the “as-is” and “to-be” states. The final part needed is the cost of implementation. With this you can present the Return On Investment (ROI) and Total Cost of Ownership (TCO) numbers for your change. To assist with this, we can think of implementation as an information flow and use LINQ to capture the elements of the programme to deliver the change, to understand  the costs. This can include software, hardware, maintenance, training, support, people, etc.

With this new and increased level of knowledge you can implement sooner and with confidence. Your implementation can also be informed by LINQ. The value lens helps with scheduling the tasks that need to be done, and you deliver the high value elements first. This knowledge can input directly into the agile delivering process being used by the business.

Measuring the impact; benefits realisation
measuring benefit

As you implement your changes, your future state model becomes your current state of how you now operate. You already have metrics including time and money input into the model; so now it’s time to validate whether you achieved your documented expectations.

Plugging in your real numbers to the model will show you where you have hit the mark and where more improvements are required. Perhaps your assumptions were wrong; these can now be adjusted to reflect reality. Adjusting those modeled numbers into reality provides the next set of change to be done.

Reporting to the Executive and giving them the confidence that they said yes to the right thing is also simpler than before. The Insights and Dashboards from your past state and your new current state will show the result of the journey and provide confidence to say yes to the next change.

The process repeats; you are now in ContinuousNext.

This content is generously provided by Neil Calvert, CEO, LINQ Ltd

Neil Cavlert, CEO, LINQ
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Scott Kennedy