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www.blytheco.comwww.blytheco.com
Are You Ready for
Replatforming?Webinar 2: How to Build a Business Case
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Agenda
Recap: What is Replatforming?Why Build a Business Case?What is a Business Case?Next Steps and resources for today
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Introductions
Alicia AndersonStrategic MarketingAtlanta, GA-based19 years in ERP sales, service and marketing
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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”
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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
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Build a Business Case
1
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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.
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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:
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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.
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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
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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.
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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
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The stakeholders
Joe Jones, Controller
• Role: Project Manager• Owns the Document
Enjoys Excel spreadsheets, small, fluffy dogs, and walks on the beach.
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Jane Smith, Operations Manager
• Role: Process Improvement• Advises team on process
improvement techniques
Coffee addict, enjoys 80s music and crossword puzzles.
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Bill Williams, IT Manager
• Role: Technology Support
Plays guitar in a band on the weekends, enjoys zombie movies – a little too much.
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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.
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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
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Executive SummaryBusiness Case Analysis TeamProblem DefinitionProject OverviewStrategic AlignmentCost Benefit AnalysisAlternatives AnalysisApprovals
Sections of the Business Case
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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
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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
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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
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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.
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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.
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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
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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
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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
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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…
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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
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Define your project teamUse the Worksheet!
Your Homework for Next Time
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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
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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.