Investigating a Process Approach on Business Cases: An Exploratory Case Study at Barco

Investigating a Process Approach on Business Cases: An Exploratory Case Study at Barco

Kim Maes (Antwerp Management School, University of Antwerp, Antwerp, Belgium), Steven De Haes (Antwerp Management School, University of Antwerp, Antwerp, Belgium) and Wim Van Grembergen (Antwerp Management School, University of Antwerp, Antwerp, Belgium)
Copyright: © 2013 |Pages: 17
DOI: 10.4018/ijitbag.2013070103
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Abstract

Strategic information technology (IT) enabled investments are among other types of IT investments, characterised by the highest level of uncertainty and the highest potential for value creation. They are often associated with product/service innovation, new business models or an enterprise-wide transformation (e.g. Enterprise Resource Planning (ERP) investment). Although these may deliver operational excellence and a competitive advantage, it is a risky endeavour with high failure rates. One of the critical factors to achieve a successful outcome is to develop a sound business case. Many organisations perceive a business case as a valuable instrument for investment justification and decision-making, yet other organisations still do not develop a business case due to insufficient knowledge. In response to this knowledge gap, Ward, Daniel, and Peppard (2008) designed a business case development process that ends on investment approval. Others scholars however call for a continuous usage of business cases throughout the entire investment life cycle. The present research responds to this call with an exploratory case study in order to identify multiple business case tasks that complement the process of Ward et al. (2008). The paper starts with a description of background literature on what constitutes a business case whereof the authors derive a new definition. The authors then set the context and structure for an initial business case process based on the contribution by (Ward et al., 2008). The findings of the exploratory case study and the initial business case process are discussed.
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Introduction

The pervasiveness of information technology in contemporary organisations is immense both at the operational and strategic level (De Haes & Van Grembergen, 2009; Peppard & Ward, 2005). Although people might still be performing some parts of business processes, their work is largely enabled by information technology. (Weill & Ross, 2009) argue that information technology can facilitate an organisation in more strategic endeavours as well, such as product and service innovation or mergers and acquisitions. These so-called strategic IT enabled investments, even more than others, are consistently recognised as investments that are characterised by the highest level of uncertainty and the highest potential for value creation (Otim, Dow, Grover, & Wong, 2012). In a survey by AMR Research, ASUG and SAP, organisations argued that in order to realise the potential value from such investments, a detailed business case is a perceived as crucial and should therefore always be developed (Swanton and Draper, 2010). Likewise, (Ward et al., 2008) discovered that two-third of the organisations are convinced that a business case is a very important instrument in order to gain value out of investments. A business case should furthermore incorporate risks associated with the investment and may help in the analysis of their potential impact and probability (Gibson, 2003; Papazoglou & van den Heuvel, 2007).

A business case, in literature defined as a formal document that summarises costs, benefits and impact of an investment (Hsiao, 2008; Krell & Matook, 2009), is frequently employed by organisations as they perceive it as a valuable instrument. The dot com crisis has stimulated organisations’ cautiousness and pessimism compelling practitioners to more frequently develop a business case in order to start or continue a strategic IT enabled investment (Westerman and Curley, 2008). In 2008, 96 percent of the European organisations surveyed by Ward et al. (2008, p2) were required “to produce some form of business case when justifying IT investments.” However, the utilisation of business cases is not as thorough and anchored as might be perceived. Some organisations are still not developing a detailed business case prior to an investment (Beatty & Gordon, 1991; Charette, 2006; Goldschmidt, 2005; Powell, 1993) as they lack adequate skills and in-depth knowledge on business cases (Farbey, Land, & Targett, 1999; Jeffrey & Leliveld, 2004; Taudes, Feurstein, & Mild, 2000). Others develop weak business cases without the specification of what benefits the investment should realise because it could hinder the approval procedure (Farbey et al., 1999). According to Franken, Edwards, and Lambert (2009, p65), most business cases developed “gather dust on the shelf or are lost on someone’s hard disk” after the investment is approved.

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