5 tips for better business cases

It is clear by now that when officials at the Office of Management and Budget talk about information technology and funding, a discussion about business cases is not far behind. But many agency officials could still use some coaching on how to prepare the yearly justifications and spending plans they must submit to OMB officials each September.

After several years of examining and writing business cases, OMB managers and agency officials have made significant strides toward meeting the requirements outlined in Circular A-11 and preparing Exhibit 300s, the forms used to collect business case data. Agency officials no longer have to begin each year trying to define or understand what "business case" means.

"Everybody's gotten more sophisticated about this," said Bruce McConnell, former OMB chief of information policy and technology who is now president of McConnell International LLC, a consulting firm.

Many officials, however, still face challenges in making business cases. Simply writing a standard request for funding and including a set of performance goals is not sufficient.

To make a business case for new IT projects requires a focus on technologies and processes that can be copied or reused and on qualified people who can manage a project from beginning to end. Here are five tips from business case experts on how to prepare an Exhibit 300.

1. Link IT spending to the mission

Among the tasks that agency officials often find most difficult is demonstrating in a business case how a particular IT investment contributes to the agency's mission, McConnell said. It may require simply highlighting, for example, the need for a wireless network because more employees are using mobile devices. Or it may mean stating that two Web servers instead of one would allow older citizens to apply online for retirement benefits at any time.

More often, however, making the link between a request for funding and what it would enable is more complex because IT investments are not only for technology but also for everything that makes the technology work.

"You're not just buying IT; you're buying capability to run a program, capability to run the government," said Mark Forman, former administrator of e-government and IT at OMB who is now head of worldwide services for Cassatt Corp., a software company. In a good business case, the main focus shouldn't be IT, he said. "It should be the business results, and that means you have to focus on how people use the technology for the business processes, how they're trained to use it and so forth."

Agency officials have improved their ability to make those connections, said Dan Chenok, former chief of the IT policy branch at OMB who is now vice president and director for policy and management strategies at SRA International Inc. But they can do better, he said. And new tools are available to help.

OMB officials are interested in links between an agency's IT budget requests and its other budget and program requests. To help them and other agency officials evaluate those requests, they developed a software tool called the Program Assessment Rating Tool. "That's really only a year old, so agencies are continuing to look to improve that," Chenok said.

2. Identify the project's management team

The business case should identify who would manage new IT projects and how they would manage the projects and organizational changes associated with them.

Shepherding a program from development to delivery requires someone to oversee all the pieces. Describing how agency officials plan to fill that program management role is part of developing a good business case, McConnell said.

But the challenge is larger than managing technology. "That's important," Forman said, "but it's the management of the business transformation, knowing who to partner with on the user side, knowing what mix of training and reorganization and so forth [that] has to happen."

Agency officials who have the most difficulty managing IT projects often are the ones who least understand good project management or why it is necessary, Forman said. "The vast majority of agencies don't figure it out until either OMB comes back saying, 'You've got a lot more risky project than you realize,' and puts it on the high-risk list, or they start to actually see the cost and schedule overruns and they can't figure out why."

OMB officials have provided new guidance on program management. But not everyone agrees on the importance of having project managers who are certificated in project management. In many disciplines, certification doesn't guarantee performance.

IT is littered with failures, and program managers often are said to be only as good as their last project, McConnell said. "The question is, 'Why are you credible?'" he said, adding that the most credible project managers are those who have had recent successes with difficult programs.

3. Take advantage of what has been built before

The best business cases will show how proposed IT projects would build on or reuse portions of existing information systems.

For several years, OMB officials have been encouraging agency leaders to share or reuse entire applications and systems. Now, they have access to the Federal Enterprise Architecture Management System, a database that OMB officials use when they review business cases. With that access, federal managers can search the database for applications or systems that other agencies have proposed or developed that may suit their needs.

Using another resource — the Component Organization and Registration Environment Web site — agency officials can find pieces of applications and systems to reuse in their programs.

"You now stream together applications or components of applications into a business process," Forman said. "Business cases should be becoming less and less about creating a new IT project and more and more about stringing together components of existing IT applications to get a more productive business process."

4. Show how the piece fits into the puzzle

Agency managers must describe how new IT projects fit into the agency's overall portfolio of IT projects.

"Portfolio management" is another term managers must learn as they make business cases. The concept of managing multiple projects as a single investment is not new, but it has proven effective for agencies that must work within fixed budgets. Effective portfolio management guarantees that all programs have funding and other necessary resources as needed at various points in the programs' life cycles.

Officials at small organizations have made significant improvements in portfolio management during the past few years, McConnell said. But others are still struggling to keep up the balancing act when they try to manage IT projects across an entire Cabinet-level agency as a single portfolio, he said.

In making a business case, agency managers should emphasize how IT projects are linked, Chenok said. That way, as a budget request moves up the chain of review from office to agency to department to OMB, each successive reviewer understands the importance of that particular business case within the larger picture,

he said.

5. Match commercial tech with federal needs

Many agency managers are turning to industry officials to help them develop business cases, which makes sense, Chenok said. Part of the thinking behind business cases was to bring commercial best practices into government. If agency officials follow OMB's guidance for the Exhibit 300s, they should arrive at a balance between industry ideas and government requirements,

he said.