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Are You Ready for

Replatforming?Webinar 2: How to Build a Business Case

Agenda

Recap: What is Replatforming?Why Build a Business Case?What is a Business Case?Next Steps and resources for today

Introductions

Alicia AndersonStrategic MarketingAtlanta, GA-based19 years in ERP sales, service and marketing

Moving to automation for the first time.Transitioning to a new system.Upgrading an existing system.

What is replatforming?

This series is designed to give you the tools and knowledge

needed to make ERP transition smooth and minimize risk.

Industry analyst Mint Jutras reports that 73% of surveyed companies said that “management

driven change was requiring moderate to

substantial ERP change”

Series Introduction – May 7

How to Build a Business Case - TODAY

How to Scope Your Project - Wednesday, July 9

How to Evaluate Solutions and Build Your Evaluation Committee - Wednesday, August 6

Cloud vs. On-Premise - Wednesday, September 3

Know Your Payment Options - Wednesday, September 24

The Series

Build a Business Case

1

You have identified a missing piece in your businessERP projects fail because of inadequate planning and risk managementThe business case is a tool to help formalize the idea or argument and create the evidence to move your project to the front burner

Move your idea to the “front burner”

According to one recent report, more than 29% of

ERP implementations fail to achieve even half the

planned business benefits.

Describe the business challenge Assess the potential benefits of the investment Assess the potential costs of each option Assess risks and issues that might arise during the implementation List the pros and cons of potential solutionsDescribe the implementation approach Measure potential and actual ROI 

What is a Business Case?

A business case is a document that helps you weigh the pro’s and con’s of a solution and understand if there is a cost benefit to changing your solution.

It will help to:

Establish a baseline of how things are nowAnticipate risks of changeDefine rolesGet buy-inRecord feedback from all departmentsAlign your project with the defined company strategy

Why a business case?

A business case helps you establish a baseline and make sure there is alignment to your strategy.

The Test Case

Acme Distribution Company

Mid-sized wholesalerExpanding into global marketsUsing legacy systems and siloed spreadsheetsGrowing organically

Let’s walk through building a business case for a sample company to help illustrate how this will benefit your company

The Stakeholders

Joe Jones, Controller

Jane Smith, Operations Manager

Bill Williams, IT Manager

The stakeholders are those that have recognized a need in the business and will be involved in documenting the requirements, communicating with teams, and facilitating the project.

Define Team Member RolesAssign Ownership of the Document

First things first

First you need to start by defining the team that will be responsible for the documentation and unbiased gathering of the information. piece about why these things first

The stakeholders

Joe Jones, Controller

• Role: Project Manager• Owns the Document

Enjoys Excel spreadsheets, small, fluffy dogs, and walks on the beach.

Jane Smith, Operations Manager

• Role: Process Improvement• Advises team on process

improvement techniques

Coffee addict, enjoys 80s music and crossword puzzles.

Bill Williams, IT Manager

• Role: Technology Support

Plays guitar in a band on the weekends, enjoys zombie movies – a little too much.

A New Stakeholder

Bob Robinson, COO

• Role: Executive Sponsor• Advocates for the plan• Gets approval from other

Executives• Removes roadblocks

Golf nut, dedicated grandfather, battling a Diet Coke addiction.

Formalize the ideaSupport it with dataOutlines the justification for the projectProvides a common languageCan easily be updated as new information is gatheredUse the template to get started!

Why Create a Document for your Business Case?

Formulizing the business case helps create common language for you to assess your project

Executive SummaryBusiness Case Analysis TeamProblem DefinitionProject OverviewStrategic AlignmentCost Benefit AnalysisAlternatives AnalysisApprovals

Sections of the Business Case

IssueAnticipated outcomesRecommendationJustification

Executive Summary

The Executive Summary provides general information on the issues surrounding the business problem and about the proposed project to solve it. It can be done last. piece about why these things first

Business Case Analysis Team

This section describes the roles of the team members who developed the business case. It is imperative that participants and roles are clearly defined for the business case as well as throughout the life of the project.about why these things first

Role Description Name/Title

Executive Sponsor Provide executive support for the project Bob Robinson, COO

Technology Support Provides all technology support for the project Bill Williams, IT Manager

Process Improvement Advises team on process improvement techniques

Jane Smith, Operations Manager

Project Manager Manages the business case and project team

Joe Jones, Controller

Problem StatementOrganizational ImpactTransition Approach

Problem Definition

This section documents the current problem to be solved, its impacts, and a high-level overview of any specific requirements.about why these things first

Project DescriptionGoals and ObjectivesProject PerformanceProject AssumptionsProject ConstraintsMajor Project Milestones

Project Overview

This section consolidates all project-specific information into one chapter and allows for an easy understanding of the project since the baseline business problem, impacts, and recommendations have already been established.

Strategic Alignment

Overview of the organizational strategic plans that are related to the project. This includes the strategic plan, what the plan calls for, and how the project supports the strategic plan.

Plan Goals/Objectives Relationship to Project

2014 Strategic Plan for

Information Management

Improve record

keeping and

information

management

This project will allow for real-time information

and data entry, increased information

accuracy, and a consolidated repository for all

business data

2014 Strategic Plan for

Information Management

Utilize new technology

to support company

and department

missions more

effectively

New technology will allow many business

functions to be automated reducing the

number of outside applications required to

manage these systems

2014 Strategic Plan for

Market Expansion

Engage with global

markets and improve

customer retention

This project provides standardization of

efficient financial, operational, and sales

processes so teams can be more productive.

Cost Benefit Analysis

Action

Action

Type Description

First year

costs (-

indicates

anticipated

savings)

Purchase new product and

licenses

Cost Initial investment for WP Project $100,000.00

Software installation and

training

Cost Cost for installation and set up of new

software and for training all employees $100,000.00

Reduce loss of 3 large

customers annually Savings

An immediate reduction in loss of

important customer relationships. -$150,000.00

Reduce time spent by IT

supporting non-integrated

applications and devices

Savings

IT now spends approximately 24 hours per

week supporting applications that do not

integrated with the base system. It is

anticipated that this number will be

reduced to no more than 2 hours per

week. At an average of $75.00 per hour

this results in ($75.00 x 20 hours/wk

reduced non-billable time) $1500.00

increased revenue per week.

-$75,000.00

System maintenance

required every 6 months

instead of monthly

Savings Less frequent use of IT resources working

on non-value added tasks results in

approximately $50,000 savings per year. -$50,000.00

Reduce manual data entry

and reporting processes Savings

Finance and operations now spend

approximately 20 hours per week

assembling reports and data to adequately

determine business performance and

make decisions. It is anticipated that this

number will be reduced to no more than 4

hours per week. At an average of $100.00

per hour this results in ($100.00 x 16

hours/wk reduced non-billable time)

$1600.00 increased revenue per week.

-$80,000.00

Net First Year Savings

$155,000.00

Costs of the projectCompared to benefits and savingsDetermine project viability

Alternatives Analysis

A brief summary of considered alternatives should also be included—one of which should be the status quo, or doing nothing. The reasons for not selecting the alternatives should also be included.

No Project (Status Quo) Reasons For Not Selecting Alternative

Keep the legacy system in place Unnecessary expenditure of funds for

increased staffing levels

Continued occurrence of a high number

of data errors

Poor and untimely reporting

Lack of automation

Alternative Option Reasons For Not Selecting Alternative

Outsource the implementation of a web-based

platform

Significantly higher cost

Expertise already exists in house and with

consulting partner

Alternative Option Reasons For Not Selecting Alternative

Develop software internally Lack of qualified resources

Significant cost associated with software

design

Timeframe required is too long

Approvals

The business case is a document with which approval is granted or denied to move forward with the creation of a project. Therefore, the document should receive approval or disapproval from its executive review board.

Approver

Name Title

Signature Date

Black, J. President and COO

Brown, A. Executive VP

Buy-in from the important stakeholders in your businessA connection between your project to the core business strategyA clear plan for going forwardKnowledge of how to make the project successfulConfidence in the chosen solution

A Completed Business Case will give you…

What is your role on the Business Case Team?Executive SponsorTechnology SupportProcess ImprovementProject Manager

Audience Poll

The business case team develops the requirements that will become your new system

Define your project teamUse the Worksheet!

Your Homework for Next Time

Available on our blog at http://blog.blytheco.com/?p=4423

Business Case Document TemplateBusiness Case Team WorksheetReading ListCopy of this presentation“7 Steps to Building a Business Case for ERP” Whitepaper

Resources for today’s class

Next Classes…

How to Scope Your Project - Wednesday, July 9

How to Evaluate Solutions and Build Your Evaluation Committee - Wednesday, August 6

Cloud vs. On-Premise - Wednesday, September 3

Know Your Payment Options - Wednesday, September 24

Sign up here.