RBC Method Walkthrough - Standard Reliable Business Case Analysis
Define & Improve Scope of Change
Many investments have weak payback opportunities, because their scopes are totally wrong. If you have a pure infrastructure investment, it will probably be a cost case. However, if you think about it, you often find this infrastructural investment offer new secondary investments, that have potential profit.
Sometimes, you can bundle a scope of change, that includes both the infrastructural investment, AND a profitable investment linked somehow to the first one. If you try to find profit by just saving a few hours for the IT administrator, you also find yourself with weak arguments in front of your CFO or business controller. You had to combine such investments and functions, with something that affect many employees, the turnover, the margin, many customers/citizens/patients.
At other hand, you might have to large scope with profit and user functionality arises many years in the future. Scope down to several implementation phases, and find quick wins for the users and business in the first phase.
- Discuss with finance or controllers about current calculation policies, such as the labour cost from of saved hours, calculated financial lifetime, interest rate.
- Finish by editing in the RBC Excel ToolTM the Project Set-Up worksheet
Find the potential business change and convert it into value by asking yourself what the real value will be. Saved time? Well, will staff stay or end their employment? The first results in saved time they use to do new activities and you had to decide what that secondary will lead to. Can the business managers agree to launch a new business improvement project utilising the saved hours as enabler? Activities under this phase can be:
- Evaluate current process documentation, business objectives, identified general challenges.
- Workshops or other ways, to find out what improvements need to be made.
- At the workshop - or in a later ‘Benefits advisory group’ meeting - make subjective priority what is most important.
- Register the list of possible benefits in the Benefits Screening worksheet in RBC Excel ToolTM, and make a first draft on how the benefit value formula could look like.
- In the ‘Benefits advisory group’, state how to calculate the benefits’ value, explore and find the variables and data needed.
- If suitable, discuss with Human Resource and business managers about how realistic real labour cost reduction is and strategies how to turn saved time into real money
- If suitable, finish with a gateway review and if possible, and reduce the number of alternatives before proceeding to the expenditure screening.
- Finish by reviewing Benefits Screening worksheet in RBC Excel ToolTM .
- Explore and define all IT-expenses for each of the alternatives. This usually is done by interviews, rather than with workshops.
- Edit directly into the Expenditure Screening worksheet in RBC Excel ToolTM.
- Explore and define all business change expenses for each of the alternatives. This usually is done by workshops with business management.
- Explore and define both capital cost and operational cost, and both internal and external cost.
- Include any cost arising if current IT-systems need to be taken down.
- Finish by reviewing the Expenditure Screening worksheet in RBC Excel ToolTM.
Report & Recommendation
- The Report worksheet in RBC Excel ToolTM offers most charts, tables and data you need.
- In the Report Sheet, you can compare each alternative against another and by that produce several dimensions of charts and tables.
- Use the data in the tool to create your own report in PowerPoint or Word, and pick the needed data to explain your analysis, decisions, and recommendation.
RBC Method Walkthrough - Optional RBC Analysis
- Evaluate the ‘Reliability & Priority Table’ in the RBC Excel ToolTM and consider if the benefits and expenses combined with high impact – low reliability are a too high risk to the results, or ask the decision makers.
- Define calculation formulas and find new data to the issues you need to improve
Benefits Map SetUp
For this phase, you need to have the Benefits Maps template
- Ensure you have made all possible strategic decisions first, and discharged any alternatives not likely to choose.
- Add the benefits already identified and only valid for the alternatives.
- Find and add the IT-systems functions that enabling the benefits, the process change needed, and the outcomes from the process change.
- Find owners/stakeholders to cost, process change, and outcomes.
- Identify with the owners suitable key performance indicators to measure and follow-up the change.
- Gain acceptance to the change objectives and KPIs for cost, business change, and outcomes.
Review Report & Recommendation
- If needed, review the information and calculation in the RBC Excel ToolTM.
- Finish the Benefits Map, make notes and ready to use when you later write a Benefits Realisation Plan.
- Review the PowerPoint or Word report with possible new information, analysis, decisions, and recommendation.