Last time on the Art of SharePoint Success we concluded our exploration of strategic lenses that I use to help clients understand and articulate their SharePoint related goals by looking at Enterprise Content Management and Collaboration.

In this scintillating installment we are going to delve into the third and final part of the Strategy element, the business case for SharePoint.

This is article number 10 in the series exploring my four point framework for ensuring long term, measurable success with SharePoint. There are four elements to the framework:

  1. Governance
  2. Strategy
  3. Architecture
  4. Transition

Before we dive into developing that business case....

What is a "Business Case" Anyway?

A business case is the justification for a change project. It tells the story of what, why, when, who, and how. For example:

What is the current situation? When will the benefits be realized?
Why is the change needed? Who will realize the benefits?
What is being proposed? Who will do the work?
What are the costs? How will the change be implemented?
What are the estimated benefits? How will success be monitored and reported?

There are four key reasons to develop a business case, and all are potentially important with regard to a SharePoint initiative:

  1. developing a business case is an analytical process that helps you to develop a deeper understanding of the current situation and the issues and opportunities you face
  2. in most organizations a business case is a necessity for gaining funding and approval for a proposed change project
  3. the business case is key to successfully coordinating and managing different stakeholders because it provides a clear and consistent message
  4. business cases are used by management to prioritize and select projects

When I am working with clients I explore two dimensions of a business case. I call these the Left-Brained business case and the Right-Brained case. I’ve borrowed these terms from popular psychology in which broad generalizations are made to suggest that the left side of the human brain is associated with logical or rational thought, and the right side is associated with creative or emotional thought.

Getting the correct balance between these two dimensions of a business case and adjusting that balance as you progress is key to getting your project approved. I’ve never seen two situations that are exactly the same when it comes to the business case for SharePoint.

The Left-Brained Business Case

The Left-Brained business case is typically in the form of a well-structured document. It relies mainly on quantitative data, and at its core is a financial analysis of the costs and the benefits associated with the proposed change project. Table 1 presents a brief summary of the five key financial measures that are usually used in the financial analysis of a project.

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Table 1: Financial measures used in the analysis of a project

Below is a very simple example of a financial analysis for a project that requires a one off investment of £400,000 [US$ 627,200] and generates a total return of £525,000 [US$ 823,201] over 7 years. (I should warn you that I am by no means a financial analyst!)

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Table 2: Simple example of a project financial analysis

In this example the project will give an overall return on investment of 131.25%, the NPV is positive, and the initial investment of £400,000 will be returned in 4 years. The project is worth considering as the estimated returns are positive, but the go/no go decision should rely on a number of other factors including a sensitivity analysis, a comparison of this analysis against that of other potential projects, consideration of how the project aligns with strategic objectives and a risk analysis.

Many people use "ROI" and "business case" synonymously. ROI is just one of a set of financial measures used to evaluate an investment, and the financial measures only tell part of the story. Don’t get hung up on ROI!

The Right-Brained Business Case

The Right-Brained business case relies on evoking an emotional response to the proposed change project, it’s about telling the story and setting a vision for the future. There are a number of different techniques that can be used to build a right-brained business case for SharePoint.

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Table 3: Elements of a right-brained business case

In 2007 I worked with one of the UK’s major high street banks to implement a SharePoint based project management solution. A key part of their business case was a working, virtual machine based prototype of the proposed solution. They invested a relatively small amount of money in developing the prototype which they then took on a road-show demonstrating it to key stakeholders.

The prototype was a far more effective way of showing value and benefits than a spread sheet, graph or PowerPoint presentation. Key stake holders could touch, feel and interact with the model and it was personalized with the banks corporate branding, template documents and the names of real people working in the bank. That prototype was instrumental in securing a £250,000 [US$ 392,000] investment, and the project was a huge success.

At a conference a few years later I was talking to a delegate and noticed from her badge that she worked for the bank in question. “That solution changed the way we work”, she told me. I’ve seen similar approaches work with many other clients including a billion pound retail business, a global consultancy, a European central bank and a UK based international retailer to name just a few.

Coming up next time….

Next time we will wrap up the business case for SharePoint, and the Strategy element by examining the costs and the benefits of SharePoint. I’ll be give some real world examples to show how world class organizations have built their business cases, and I’ll present a set of metrics that you can use to measure success.

And finally…

If the business case for SharePoint is something that keeps you awake at night you may be interested to know that I’ll be presenting “How We Do It: Building bullet proof SharePoint businesses cases for world class organisations” at the International SharePoint Conference in London in April. Be there or be square!

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