How to get your IT project funded: Build a Solid Business Case: Step 2, Criteria

So what is Criteria? to put it simply it's "who cares about what?

So what is Criteria?  to put it simply it's "who cares about what?".  Who is the "who" in that statement? it's your audience/decision makers.  The purpose of this step is to accurately determine your audience for your business case and the factors they will use (criteria) to make the invesment decision. I always get asked why do this step?  I have two reasons:

  1. You can avoid missing key decision criteria.  This could lead to undermining the validity of the business case and its creators
  2. You can really focus your team resources on those payoff areas of most importance to the final decision.

I had a colleague back at HP explain criteria once as trying to win a poker game but being ignorant of the rules.  That is very true.  You wouldn't know if aces were high or low, if jacks were wild or not, or what the betting limits are.  Without that knowledge it's a waste of time right?  It's the same thing when putting your business case together.  The "game" being played is IT invesment selection and the players are the decision participants (who, by the way, have rules by which they decide if the business case wins or loses).  So the main rules of the IT investment selection game are the decision criteria that these "players" use.

Over the years I have seen some potentially fatal decision criteria mistakes.  I wanted to make sure I laid these out for you all so that you can avoid them.

  1. Criteria used in the business case are deemed irrelevant by decision makers.
  2. Criteria are missing that are of high interest to decision makers.
  3. Criteria focuses too much on systems and data benefits and not enough on the business value implications.
  4. Intangible criteria are mistakenly left out or underplayed.
  5. Criteria that could have been tangible (ex. monetarily quantified) are shown instead as intangible (nonmonetary benefits).
  6. Criteria that should have been shown as intangibles are presented as unbelievable tangibles.
  7. The most important criteria are underanalyzed and the least important criteria are overanalyzed.

This criteria step has four key tasks and will provide strategies and methods for avoiding the problems like I outlined above.

Task 1:  Define Decision Makers

Let me put a little more definition around that term "decision maker".  These are people who either directly influence or actually make the decision to invest in the infrastructure being presented in the business case.  So, in essence, they are the only ones that count when you are putting your case together.  You need to understand their vision, values, and goals if your business case is to succeed.

I have always found that grouping these decision makers helps.  I group them by name, enterprise responsibility and/or title, and decision process role.  You need to know who these people are and what they do if you are to ensure that you have down what's important to them.

Task 2:  Identify Decision Criteria

This task is really the most time consuming and labor intensive of this step.  Decision criteria are factors (both tangible and intangible) that are used by decision makers to determine the attractiveness of investment alternatives.  What we are going to do in this task is flush out what those criteria are.  What I usually shoot for here are between 30 to 40 decision criteria "candidates" and then I filter down from there to the top 6 to 12.

As I mentioned above, in many years of putting these things together there are some pitfalls I want to make you aware of.  These are very common so make sure you are mindful, double-check everything.

  1. Asking the right people, who give wrong answers (either inadvertently or on purpose)
  2. Getting the right answers from the right people, but then having the business case team misinterpret the remarks.
  3. Being unable to contact the right people
  4. Overlooking valuable secondary sources

As you can probably imagine, having any erroneous or missing criteria can mislead management into making the wrong decision. I have some "home grown" tools and some methods that were passed down to me from my mentors that help avoid getting whacked by misguided criteria.  So I'm paying it forward now..;-)

There are three main principles of good decision making criteria that you should always keep in mind.

  1. Business results focus:  define the value in terms of business results, not system functions or features
  2. Who cares about what:  like I stated in the beginning, you need to link value to personal concerns of the individual decision makers.
  3. Alignment:  you need to maintain strict linkages of investment features to enterprise business needs

I think we can all agree that the objective of this task is to find the right criteria and then place those criteria in the business case exactly where they have the highest value.  So imagine a triangle with the base being the Systems/Data (Managers) layer, then the next layer being the Objectives/Tactics (VPs, Directors) layer, and then finally at the peak of the triangle would be Strategic Results (CEO, BoD) the goal here is to get as many of the decision criteria above the Systems/Data layer and into the area where the majority of business cases that win are found.  These top two groups think, plan, and operate in the realm of business results.  This is where you need to be focusing. 

The other point here is that even though you are targeting the enterprise area where business results live, but you need to be sure to align with the interests of the decision makers.

In the next post I'll cover how to build a value matrix and to filter the criteria down to the top 6 to 12 and to make sure that you are specifying intangibles.

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