Business Case Revised Deliverable Template

From MIKE2 Methodology

This deliverable template is used to describe a sample of the MIKE2.0 Methodology (typically at a task level). More templates are now being added to MIKE2.0 as this has been a frequently requested aspect of the methodology. Contributors are strongly encouraged to assist in this effort.

Deliverable templates are illustrative as opposed to fully representative. Please help add examples to this template that are representative of the proposed output.

The Business Case (revised) should be revisited. In phase 1, the Business Case was described in terms of expected benefits, risks, assumptions, and projected costs. It is now possible to describe each of these in greater detail, and to add information about schedule, including interim milestones. Based on the new architectural components, technology costs can be accounted for and more accurate predictions can be made about the skills required for implementation

Contents 1 Examples 1.1 Business Case for a Enterprise Data Warehouse 1.1.1 Background and ABC’s current Information Management environment 1.1.2 Objective(s) 1.1.3 User Requirements 1.1.4 System Scope 1.1.5 Benefits 1.1.6 Financial Case 1.1.7 Proposed Project Timetable 1.1.8 Net Personnel & Operating Cost (NPOC) 1.1.9 Risks 1.1.10 Recommendation

Examples

Listed below is a more detailed Business Case for a Data Warehouse:

Business Case for a Enterprise Data Warehouse

Acknowledging the Enterprise Data Warehouse (EDW) has already been initiated; the purpose of this Business Case is to obtain formal approval to build further increments of the solution. This Business Case also seeks to clearly demonstrate opportunities the core EDW capability provides for realising benefits in excess of cost.

Background and ABC’s current Information Management environment

The ABC was formed through the merger of three separate XYZ organisations in 1995. The ABC's current IM environment consists of a myriad of independent systems, including all of XYZ’ s corporate systems, situated at some 43 different locations throughout US. The ABC’s core business of materiel management and the size and nature of ABC activities forces a heavy reliance on these systems, demanding strong integration of key inventory, personnel and financial information. There is however no single enterprise resource planning and management environment in the ABC or XYZ and IM systems were identified as a significant risk at the organisation’s inception.

The Business Information Systems (BIS) Team report produced in 2002 identified many deficiencies within ABC’s existing Information Management, organised into the following subject areas:

• Proliferation of Reporting Solutions
• Proliferation of Data Sources
• Data re-keying
• Data quality
• Reporting/Modelling Limitations.
• Insight into Materiel Costs
• External Scrutiny

Following an analysis of possible solutions (partially reproduced in this business case), the BIS Team Report recommended the creation of a Virtual Enterprise Resource Planning capability, using data warehousing technology. In September 2004 the ABC Executive accepted this recommendation.

Objective(s)

The primary objective of the EDW is to deliver an enhanced information management capability that will enable ABC personnel to conduct near real-time sophisticated information analysis and improve management decision-making. The EDW will establish a user-friendly, flexible, and high performance decision-support environment. Specifically, the EDW is intended to:

• Enable ABC managers at all levels to conduct advanced management analysis and improve decision-making. The EDW will provide the information needed to look beyond current data to verify suspected trends and seek out unknown ones. The capability to drill-down, aggregate and graph data will allow users to conduct trend analysis and "what-if" scenario planning.

• Reduce the level of effort required to create management reports. The EDW will reduce the need to manually extract, re-key and manipulate data for reporting purposes, via automated data sourcing and integration. Manual data manipulation efforts will reduce from days to minutes, enabling ABC staff to focus more effort on conducting value-added analysis relevant to ABC's core business. Users will be able to make informed and faster decisions with less emphasis in finding data and more on analysing information and working with other staff to develop collaborative decisions and solutions.

• Provide ABC leadership with a consolidated source of near real-time information related to ABC's key business processes. The EDW will provide ABC with a means to source data from disparate XYZ and ABC information systems and present that data as authoritative information to users immediately, without having to search for it and confirm its accuracy. This will prevent the proliferation of "islands" of reporting solutions that are manually intensive to update and encourage multiple versions of the truth.

• Enable a flexible and responsive reporting capability that will enable ABC staff to quickly respond to ad hoc requests for reports. This capability will enhance ABC's reputation with key government stakeholders and ensure that ABC personnel are able to respond to ad hoc request with minimal impact to their normal business responsibilities.

User Requirements

A summarised version of Reference F is provided at Annex B.

System Scope

Scope Inclusions.

• Users. The current users of the EDW consist of key process managers. Over time, the users of the EDW will include all Divisions of ABC, ranging from senior decision makers to division planners. While the initial data warehouse is ABC-centric, in the future the EDW platform should be capable of eventually providing services to the XYZ Organisation (ADO).

• Functions. The data warehouse will perform the following functions for the ABC:

• Data Extraction – The Extraction Transform and Load (ETL) tool provides the processing capability to extract data from existing XYZ operational systems and transform it so that the raw data can be converted into information that meets the requirements of the business user communuty. The ETL component of the DDW will enable a reusable process that will allow for the introduction of data from many disparate source systems into the consolidated information management environment provided by the data warehouse. Modern ETL tools provide significant performance improvements over traditional processing methods by providing support for process optimisation (e.g. fully utilising multiple CPU platforms), improvements in developer productivity (through visualisation, re-use and the leverage of metadata) as well as supporting multiple database platforms.

• Data Storage and Integration – The core database provides the system with the ability to store information in a structurally coherent fashion that is optimised for its specific usage. Data will be stored and organised in the following two repositories:

• Operational Data Store (ODS) - The ODS will have a more traditional, transactional arrangement optimised for the storage of fine-grained, atomic transactions. This data will be integrated and stored in a highly structured form (technically referred to as 3^rd normal form) and will enable complex analysis to be undertaken by users with sophisticated querying skills.

• Integrated Dimensional Store (IDS) – The IDS will source its data from the ODS via an ETL process and will recast the data in a format that is more easily understood and navigated for reporting purposes by end users. The IDS uses a metaphor of a "cube" to store data, with data being organised into "dimensions" (e.g. products, organisation, location) and "facts" (e.g. quantities, cost amounts).

• Data Quality – The data warehouse will provide ABC with the capability to assess and cleanse source data so that it data quality issues can be identified and addressed. Data Quality processes, built into the EDW ETL processes will provide quality checking and amendment functionality as the data is loaded to the data warehouse. The tools will work in conjunction with data quality process that will form an important part of the overall DW governance program and will provide assistance and support in identifying business rules within the data as well as providing ongoing support for the Data Quality process by providing metrics and guidance into which data elements require further investigation.

• Metadata Management – The EDW will include a metadata repository that will allow users to know where their data came from, what transformations were performed on the data and what calculations are used to generate the reports. Metadata is the complete set of information that correctly defines the data that is necessary for an organisation to function, and is commonly referred to in the data management space as "data about data." Metadata generally consists of data definitions and the other components of a data dictionary, such as field types, data formats and value ranges but also includes information related to data transformations, business processes and organisational ownership. Organising and tracking metadata is important to the on-going maintenance of a system because it provides a complete set of data documentation for deployed solution which can be referred to if changes need to be made to the system. Also, if issues or questions arise regarding the validity of information that has been deployed through a system, the metadata can provide a conclusive lineage of how existing source data has been leveraged to construct the final outputs.

• Interfaces. The EDW, in its final state, is intended to have automated interfaces to all major XYZ enterprise information systems. The deployment of the DDW ETL tool in the EDW environment will enable Project delivery teams to undertake the development of interfaces to existing XYZ operational systems at a lower cost than if each specific use case would have deployed infrastructure on its own through reuse of the ETL tool and data extracts.

• Systems To Be Replaced. The EDW Capability is intended to replace the numerous ABC data marts (e.g. Access, SQL Databases, spreadsheets) that currently exist throughout the ABC. As the centralised data storage and reporting capability deployed under this business case is leveraged by the delivery of projects to deploy new reporting functionality, legacy departmental reporting solutions will be replaced and processes to replace those systems established.

• Scope Exclusions. The following items are considered to be outside the scope of this business case:

• Cost/benefit analysis related to the delivery of functionality for specific EDW projects, particularly as they relate to data sourcing, storage and reporting functionality in support of ABC divisional requirements. While the delivery of these projects is dependent on the deployment of DDW capability, the specific cost/benefit analysis related to each specific project will be the subject of subsequent future business cases.

Benefits

Sustaining Business Value. A leading global research and advisory firm, produced a report (Reference L) encouraging enterprises to focus on the bigger picture when choosing to implement a data warehouse, with primary focus on its ability to sustain business value. The challenge is to assess the DDW's Return on Investment (ROI) based on measurable indicators linked to key business drivers. This focus is central to the following analysis and involves consideration and measurement of both qualitative and quantitative benefits relevant to ABC's core business. The qualitative benefits have been separated into functional subsections (e.g. workforce, operation), with the quantitative analysis largely provided under the financial sub section, providing the justification for the indicative order-of-magnitude cost reduction possible.

Assumption. Gartner suggests (Reference L) it is extremely difficult to determine ROI before a data warehouse implementation and even harder to assess afterwards. Whilst a high-level indicative cost/benefit analysis was conducted and used in this business case, this problem seems especially true in ABC, as much of the baseline IM cost data essential for a proper ROI analysis is not readily available. The lack of accurate baseline cost data for the current IM capability and replacement DDW capability means that determining a specific number as the DDW's projected Return on Investment will simply be misleading.

Workforce Benefit – The DDW will provide a reduction in the level of effort required for creating management reports and increased opportunity for value-add activity.

• As the DDW capability matures, key ABC knowledge workers will progressively realise across-the-board reduction in manual data manipulation efforts, freeing them instead to conduct high value information analysis and focus on improved management of ABC's processes. The DDW capability enables this through the following qualitative benefits:

1. Reduction in data sourcing and reconciliation efforts through automated ETL processing

2. Simplifying compilation of detailed reports via data consolidation across multiple source systems, reducing the need for multiple re-keying of data

3. Enabling a flexible and responsive reporting capability allowing ABC staff to quickly respond to ad hoc requests for reports (eg ministerial inquiry), without shifting team priorities at the expense of other tasks.

4. Knowledge creation and transfer by providing access to business intelligence information in a consistent manner, either via standardised system or well documented querying processes, to appropriate individuals.

Financial Case

• EDW Cost Projection. The estimated ongoing costs for the EDW capability were reported to the ABC executive in Reference I, estimating $.8m for the first year of production and $2.4 - $2.7m annually when more than one project has entered production. A review of DDW spend to date, based on cost data provided by in March 2004, established the infrastructure and support cost to date as $6.8m (excludes costs for Projects Phase 1-7). The benefits assessment in this section is based on these cost figures

Proposed Project Timetable

Priority action is being taken to complete the EDW as a production system deployedn for end May. This will include a Proof-of-Concept based on the ASD Demand Profiling KPI. System deployment on the DSN is currently scheduled for FY04/05, with ongoing funding yet to be approved.

Net Personnel & Operating Cost (NPOC)

The EDW Program has requested the following funding for the next six years:

	04/05	05/06	06/07	07/08	08/09	09/10
DW –proof of concept and implementation across XYZ	$5m	$3m	$3m	$4m	$4m	$4m
DW Support	$2m	$4m	$4m	$0m	$0m	$0m
IBM	$1.4m	$1.4m	$1.4m	$0m	$0m	$0m
TOTAL	$8.4m	$8.4m	$8.4m	$4m	$4m	$4m

Table 1 - DDW Funding Request

The Net Personnel & Operating Cost (NPOC) Model is currently under development by XYZ and has not been approved. When implemented, it will apply to major capital projects and is calculated by determining the net difference between the gross cost estimates for the capability offset by the baseline funding for the current capability. In the absence of available baseline data for the current ABC IM capability and given the time frame for business case development, a detailed NPOC assessment has not been included. The projected costs for operating the DDW capability have been estimated and produced in the Benefits section for further analysis against potential benefits. Refer to this section for further information.

Risks

Given the available timeframe for business case development, development of a Risk Management Plan was out of scope. There is however a wealth of material regarding industry success and failures with data warehousing, so a brief overview of representative potential risks associated with the EDW has been provided below.

Note - this does not replace a full and detailed analysis of the risks involved with the DDW capability and implementation of a Risk Management Plan in the short term is strongly supported.

Risk Area	Risk	Description
Organisational	Lack of senior level commitment to the initiative	The ABC is undergoing numerous and profound initiatives, the proposed DDW being yet another major initiative. If there is a lack of senior level business sponsorship and commitment, this could impact project funding and achievement of project goals and performance measures.
Project	Increased effort required for coordination between numerous projects	This alternative is related to the Office reporting initiatives plus the JA2077. The time and effort required to coordinate between these initiatives could impact the schedule.
Technical	Unexpected data quality issues	The largest effort for this alternative would be data extraction, transformation, and loading. When extracting legacy data, data quality issues inevitably arise. In some cases, these issues can be severe and can negatively impact cost and schedule.

Recommendation

The recommendation is that the client approve the business case as an element of DDW project initiation prior to the introduction into service of the core EDW Capability.

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