Your digital business case’s impact on operations
Impact on Operations is CRITICAL for success. If you’re going to invest in implementing new/upgraded technology, you must consider two factors: what is changing and what’s the lifecycle of what’s being delivered.
From a change management perspective, you must consider the scope of work required here. As with any technological change, it'll impact HOW people work. Lots of communication and digital operations discussions must be considered, including:
- Which end-to-end processes are impacted?
- What future processes must be established?
- How will changes to the system be made? Which stakeholders need to be involved?
- Will stakeholders be accountable for any aspect of your delivery (e.g. security, monitoring, DevOps, etc.)?
- Do you have stakeholders’ support?
- Is there an expectation that other groups will also use this system/technology?
- Who is accountable for forecasting growth? Who’s accountable for paying for it?
- How will the business stakeholders get involved?
- Who needs to be included at quarterly planning sessions (this may affect operational costs)? Storage, computing, and scalability (e.g. architecture, continuity planning, etc.) all have operational costs (time, money, and support) to plan for.
These are all questions that will impact the true costs of your digital transformation initiative, so you must have visibility with each of these items before you can stand behind your budget confidently.
Considering the expected lifecycle and use case of what you’re delivering, in today’s digital age, you’re delivering a product – it's a service or software solution that will have a beginning and end of life in your organization. Internally managed solutions will require a product owner to manage the lifecycle, enhancements, defects, feature requests, and prioritization of this work. If other teams are required to support this new product, you may need various operational/technical support folks to keep things running smoothly.
Finally, you may also need a site reliability engineer to tune, tweak the infrastructure, and balance the cost of running the system/technology with the benefits you’re expecting to enjoy for the life span of this beautiful, shiny new product that will increase your revenue, help engage your customers, or replace outdated systems. Chances are, none of the people at your organization have the additional capacity to take on more work. This means training, hiring, and planning need to be accounted for in your digital business case in order to get the right people in place to make your vision a success. But we’ll dive into that when looking at the costs in the next section.
Your digital business case’s impact on costs
Turning now to financials, of course, you’ve added the initial costs to purchase or build your new product and any licensing, tooling, or vendor support costs needed to complete this work. But you’ve also included growth projections (to account for additional volume in processing, storage, and computing) as well as people’s effort and time to learn, train, hire, revamp processes, manage this new product and build new ways of working that include all the impacted teams, right? If you answered yes, you’re on the right track! And your finance team should love that you’ve captured the full Total Cost of Ownership.
Oftentimes, current business case approval ONLY focuses on one-time costs for capital expenditures and nothing operational. This huge gap can cause serious operational issues - just ask any shared service team - they’re the ones who have to support more and more - with no headcount increases! This practice not only falsely represents the ROI time period but results in an operational quagmire as impacted teams don’t have a framework in place for using or supporting your product after your go-live date. And if this is happening throughout your organization, this problem is multiplied with every new product launch as those centralized areas are being given more to support and no additional headcount or expertise to support properly.
Even if you’re only doing a small-scale initiative introducing a SaaS-based solution, someone needs to be accountable for managing access, updating processes, communicating what’s new for other teams, quarterly planning on new features, major releases, etc. While these aren’t huge efforts, if your organization isn’t ensuring that teams can support what you’re bringing in, you're not set up for success.
Oftentimes, IT teams (security, architecture, DevOps, etc.) are stretched pretty thin having to support initiatives like this, so these teams will probably be over capacity and have very little time to dedicate to your initiative - which introduces risk. Not only is there a potential for single-threaded architecture and lacklustre security assessments, but if anyone wants to tweak this solution to include additional use cases after the fact, it can be quite a heavy load if fundamental security and architecture plans have not been put in place.
Adding the costs of these folks' time into your equation will increase your ROI period, but it does offer a clearer picture of the True Cost of Ownership your organization will be undertaking.
As you can see, today’s Digital Business Case must include the lifecycle of your solution and reflect the people and tools needed to support it. If your organization isn’t doing this, ask why and point out the risks they’re (unknowingly assuming). We’ve all worked on initiatives that saw little to no adoption after the fact. We’ve all heard stories of the finance area not being able to reconcile expected gains from capitalized expenditures. If you work through the following criteria, you won’t have to worry about either of those scenarios happening to you.
Takeaways for the right ROI-TCO balance
Successful Digital Business Cases need special attention in two areas:
Impact on Operations:
- Additional headcount (training and support, new roles may be required; PO, Agile Delivery Manager, etc.)
- Operating costs (Year 1 and beyond if known; licensing, compute, storage, updates)
- Digital operations assessment (time/cost calculations for stakeholder management sessions and planning, new E2E processes, etc.)
- Decommissioning of legacy systems (this may be applicable, and if so, what's the timeline for when you can plan this work, and what will the cost savings be?)
- Additional headcount
- Initial expenses (SW build/Vendor costs/SAS licencing)
- Ongoing operational costs (licensing, computing, storage, upgrades, etc.)
- Time calculations for training/planning/building product ownership
- ROI = Potential growth and benefit gained from this expense (if you don’t have the TCO, this assessment will not be accurate)
- Any costs associated with the impact on operations (listed above)
- Expected velocity for future changes (compared to today’s baseline)
- Expected savings or increased revenue