The business case is a proposal to fund programs, initiatives, or specific projects. It describes scope, activities, and expected outcomes and a rationale comprised of a total cost versus benefits of investment analysis.
The process of developing the business case fosters stakeholder support and minimizes the tendency for the data management program to devolve into discon- nected activities.
Business cases may be developed for the entire data management program, for program elements requiring sustained funding, or for specific data management projects. They have both strategic and tactical components.
For instance, at the program level, a strategic aspect of the business case recognizes the need to reduce cross-functional data redundancy. As such, the business case would address organization-wide challenges, including topics such as why the organization is focusing on minimizing redundancy, business functions that are impacted by redundancy, major existing issues that the program will address, etc. The tactical component of this business case would define how strategic objectives will be satisfied, including the following:
- Defining related projects within the sequence plan Identifying key program deliverables
- Translating progress into metrics
- Determining required sta resources
- Justifying the costs, benefits, and risks
The business case comprises the cost-benefit rationale of data management activities and deliverables (e.g., risk mitigation, return on investment, strategic alignment, improved quality, and availability of data assets). At the program level, it should be strategic in scope, addressing the data assets and the flow of data supporting business processes performed for acquisition, maintenance, delivery, and consumption. A business case typically examines risks (financial, operational, and reputational) incurred by suboptimal management of data assets; operation costs (e.g., data integration, intangible costs such as operational disruption, and regulatory drivers); the tangible and intangible benefits expected from the investment in data management; and alignment with the organization’s strategic plan.
The data management strategy contains a long-term sequence plan to be accom- plished over a multi-year period. Most organizations employ a standard business case template that can be leveraged for the data management business case(s) in alignment with the sequence plan. The total cost required for implementation and support of the data management strategy throughout all phases is a critical input into the program level business case, and its validation and approval ensures that data management is adequately funded to meet its near- and long-term objectives. The approved business case is the justification required by Program Funding.
Total cost of ownership (TCO), also referred to as total lifecycle cost, is a method of discovering and analyzing “cradle to grave” costs of a program, product, or project. For data management, a TCO analysis would address the objectives, resources, enhanced capabilities, operational disruption, and other factors via a rational funding approach accounting for multiple factors with cost implications over time. Although total lifecycle analysis methods are frequently used for major expenditures and programs, they are not frequently applied to data management initiatives, as some costs incurred are often allocated to individual projects, creating a complexity challenge for assessing an aggregate cost. An example is the accumulation of costs due to re-architecting the same data sets or interfaces, from project to project.
Two dimensions are addressed in defining the total lifecycle cost: tangible costs, such as data sourcing, tools, sta resources, IT, and manual reconciliation processes; and intangible costs, such as data value to the business processes or for achieving competitive advantage. Intangibles are challenging to quantify; the lack of hard metrics makes tracing costs through the broad data management scope di cult. However, TCO provides senior management with a baseline to evaluate achievement of the program’s objectives over time, and to assess the adequacy of current funding. In addition, when developing a TCO, it is preferable to utilize existing industry standards if available, to assist management in benchmarking against peer organizations.