Back to Business with building Business Cases

The recent months have shown two clear trends; the first that the users are dominating the agenda for technology driven business change; and the second is the type of change that they are adopting, and implementing, doesn’t use the same model for business cases as traditional IT solutions. The basic principle is that users can spot technology that produces personal value before business can spot how to use the technology for cost advantage.
It’s been true over the last twenty years or so, as in turn PCs, PDAs, the Internet, and of course, the Web, all appeared with this manner of adoption. It’s an interesting speculation that user driven adoption fostered broader levels of experimentation in a shorter period of time, and possibly even led to a more rapid appearance of ‘standards’, be they product based or genuine industry based. Personally I think this is certainly true with Web 1.0, Web 2.0, and in creating the mass market that has led to business opportunities to make business via this new channel.


However we are now moving to the time when business is making serious moves to adopt these new technologies, and that does mean being able to make a business case. The difficulty is that the IT industry is really only comfortable with making cost justified business cases via its usually boss, the CFO. Why is the CFO usually the boss? Because IT is part of the cost structure! The new uses for technology just don’t fit here at all, as they are about doing ‘smarter’ business within the market with customers, and suppliers, around creating ‘value’ as the justification rather than ‘cost’ reduction.
This leads straight to the need to define the two terms; cost justification is when a technology improvement allows the same number of call centre staff to handle more calls in a given period; value justification is when the technology improves the ability to have the right information to make a sale, to the extent that the same number of staff close more sales in the given period. The sales boss owns the business case, what is that case? It’s not going to be a recognisable one on reducing costs, though may be it can scrape by on the basis of cost per sale being reduced.
Geoffrey Moore in his book ‘Dealing with Darwin’ has a lot to say on this topic, and the book is well worth buying in my opinion for this alone. Geoffrey advises on three types of innovation each requiring a very different business case. The third is our old friend, cost, the other two apply firmly to the new world of doing better business with the market place.
1) Making your product more valuable so customers choose to pay more for it over competitive products
2) Defending market share by doing business better with customers so that they choose to buy from you.
Both are about what is becoming known as ‘intimacy’, the relationship or understanding between supplier and customer, the value it can deliver, the flexibility it can provide, and the capturing of the opportunity to sell. All the targets of the new capabilities that SOA and Web 2.0 are providing to businesses smart enough to use them, and discussed in a further business book . The answers it would appear are out there, the challenge is not only to understand them, but also to be able to prove the value they will deliver, and the question is who will be the champions of this in the business?

About the author

61.thumbnail Back to Business with building Business Cases Capgemini Global Chief Technology Officer, Andy is a member of the Capgemini Group management board and advises on all aspects of technology-driven market changes, together with being a member of the Policy Board for the British Computer Society. Andy is the author of many white papers, and the co-author three books that have charted the current changes in technology and its use by business starting in 2006 with ‘Mashup Corporations’ detailing how enterprises could make use of Web 2.0 to develop new go to market propositions. This was followed in May 2008 by Mesh Collaboration focussing on the impact of Web 2.0 on the enterprise front office and its working techniques, then in 2010 “Enterprise Cloud Computing: A Strategy Guide for Business and Technology leaders” co-authored with well-known academic Peter Fingar and one of the leading authorities on business process, John Pyke. The book describes the wider business implications of Cloud Computing with the promise of on-demand business innovation. It looks at how businesses trade differently on the web using mash-ups but also the challenges in managing more frequent change through social tools, and what happens when cloud comes into play in fully fledged operations. Andy was voted one of the top 25 most influential CTOs in the world in 2009 by InfoWorld and is grateful to readers of Computing Weekly who voted the Capgemini CTOblog the best Blog for Business Managers and CIOs each year for the last three years.




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