In today’s economy, there’s even more focus on the return on investment to justify technology.  Developing a business case for any major capital expenditure isn’t new and there are many standard financial templates and ROI calculations for major investment areas. 

Many organizations have a financial analysis organization to support the process, but it can be to the CIO’s detriment to delegate the business case to the analysts. On the other hand, it makes sense at times to push ROI responsibility to the line of business managers. And here’s why.

The Role of the CIO
As you further position yourself as a business as well as technology leader, you need to get comfortable making the business case. Here are some recommendations:

Finance should be a contributor, not an owner.  Finance typically only looks at the hard dollar value, discounting or ignoring many “soft” benefits, such as process improvement and change management successes. If Finance owns the business case, the project will be measured only by an “on-time, on-budget” metric.  

Let business owners own the business case. The ROI business case must be owned by the business user who will reap the benefits of the investments. This is a sea change. In the past, the CIO was expected to build the business case and “own” ROI – for better or worse.  When projects fell short, IT would take the hit for the failed project.

Use appropriate benchmarks.  Industry associations and partners will recommend key industry benchmarks to fold into your business plan.  Understand what’s included in these benchmarks, and ask yourself: “Will my organization buy into these as comparable metrics?”

The business case won’t happen by itself.  The business case is one of the most valuable tools the CIO has and should be used throughout the project lifecycle to guide the organization through key decisions. 

Leadership Opportunity
While the business case is a necessary step in the decision process, the CIO should consider this as an opportunity to be accepted as a business leader who understands the financial case, the business benefits and skillfully guides the process to a successful conclusion.