Convincing business leaders to sign off on IT projects can become more challenging when budgets are tight. Presenting a business case for approval on expensive, large-scale data center projects has always been required. But these days, even smaller projects are under tight scrutiny. IT managers are required more and more to think in business terms when planning and presenting potential projects.

An Economist Intelligence Unit survey revealed that companies today are more focused on the return on investment (ROI) for IT initiatives than one year ago.¹ Respondents to another survey conducted by CIO magazine said that ROI has factored more significantly in their decisions to pursue IT projects in the past 12 months.²

CIOs and IT managers need to speak in financial terms in order to win approval for important projects. This may sound daunting, but by following some business case best practices and getting help where necessary, IT leaders can become business leaders.

The best way to communicate with business decision makers is to start thinking like one. Don’t approach your business case by determining how it will improve your IT environment. These terms won’t be meaningful to business leaders who don’t have deep technical backgrounds. Instead, explain which areas of the business will be impacted by the project. Also touch on what customer and business value the project will provide, and measure that impact based on real data.

Companies evaluating a data center investment are likely to wonder if it will improve business metrics. For example, a bank might track the number of past due loans and the average time for credit approvals. If you’re making the case for expanding the bank’s data center, consider how an expansion might speed up loan approvals. Or demonstrate how it could more accurately evaluate lending risk. Show how the project will improve business performance.

Business cases are rooted in financials, so look at both the short-term and long-term financial implications of your project. Would an expanded data center allow the bank to automate some tasks that staff members are currently paid to perform? Would it reduce or avoid other costs? Also consider additional costs, such as servers, maintenance, training and support.

Once you understand how your data center project fits into your company’s big picture, you need to gather data and build a solid business case—getting help where needed.

If your IT organization has a long list of possible data center projects, your first step is to determine which are the highest priorities. You may want to gather some initial data and use it to roughly determine which projects would provide the best return on investment. You can then analyze this short list more thoroughly.

Once you’ve identified the projects that make the most business sense, keep the following best practices in mind when building your business case.

Understand your organization’s budget and approval process. Determine exactly what is required and how long it should take to get a project approved. Talk to your colleagues who have submitted successful business cases to learn any tips that will improve your chances.

Use actual numbers from your business wherever possible. Your goal is to present an objective, accurate picture of your project’s impact. By doing so, your budget committee or CFO can measure that impact in terms that are meaningful to them. If true cost and benefits information isn’t available, use industry averages.

Keep it simple. Resist the urge to wander into complicated technical or model explanations. The related technical information may be meaningful to you, but it may have little impact on your business stakeholders. Keep your focus on the business results you’re hoping to achieve.

Get buy-in from the finance department. Run your numbers by a finance expert before presenting your case. This can help ensure you don’t overestimate the benefits of your project. It also prevents you from overlooking hidden costs such as internal staff time, business interruptions, training and early contract or lease terminations.

Creating a solid business case requires time, resources and data. If you’re short on these, HP offers several services that can help:

• Rapid Opportunity Analysis: Evaluates requests to your IT department to identify those that align most closely with your business goals
• Rapid ROI Analysis: Estimates ROI for proposed projects by measuring them against industry benchmarks, helping you determine which deserve full-fledged business cases
• Business Case Development: Provides thorough data collection and in-depth analysis to provide a clear picture of relevant costs and benefits

Building a winning business case can be an involved process. Make sure your time is well spent by following best practices. Learn more about HP’s data center transformation services, or download our white paper, Business case development best practices for data center and IT projects (319 KB, PDF).

	Your feedback is important to us. Was this article useful/informative?
	Not at all(1)		Neutral(3)		Definitely(5)