Creating Bulletproof Business Cases

By Richard Larson, PMP, CBAP, Watermark Learning and Elizabeth Larson, PMP, CBAP, CSM, Watermark Learning

Part 2: Situation Analysis

The previous portion of this series on business cases presented an overview of the main components (see the BA ConnectionNovember 2011 issue). We also covered two approaches: the formal approach of Enterprise Analysis inA Guide to the Business Analysis Body of Knowledge® (BABOK® Guide) and the informal approach known as SARIE. To recap, SARIE is a problem-solving method that is useful for developing bulletproof business cases. It has these main components or stages:
  • Define Situation  
  • Analyze Situation  
  • Propose a Recommendation  
  • Plan Implementation
  • Evaluate the Solution
Let’s continue the journey toward bulletproof business cases by covering the Situation and Analysis steps of SARIE. Subsequent articles will cover the remaining stages of the process.

SARIE: S – Situation

The Situation step identifies the business need for a change, and if appropriate, ultimately for a project. The Situation includes an understanding of business problems and opportunities. It is critical to establish an accurate situation before analyzing it or recommending anything to address business needs.

Business Need: Situation Statement

A great way to document a business need is through a situation statement. The format for a situation statement is:
  • Problem (or opportunity) of “a”
  • Which has the Effect of “b” 
  • And the Impact of “c.”
Here is an example of a fictitious company called Speedy Mortgage. The business analyst preparing the business case, Will, decided to use SARIE to help him. The first work he did was to create a situation statement:

Mortgage applications at Speedy Mortgage require on average 45 days to process, delaying their approval and final closing at an estimated cost of $100 per closed loan. Delays also cause 5% of loans to be abandoned, losing $10,000 revenue per loan, or $1.2 million per year.

The situation Will saw was a delay in mortgage application processing, and not the lack of an online mortgage system.

SARIE: A – Analyze

A bulletproof business case solves the right problem. The next part of SARIE is to determine the root cause of a problem or the main drivers of an opportunity. Namely, the “A” stage of SARIE focuses on analyzing why the problem is happening in enough detail to be able to formulate recommendations to fix a problem or take advantage of an opportunity.

Below are seven industry-standard tools and techniques that are effective for getting to the root cause. We have found this group to be practical and effective for uncovering the root cause of any business situation. The outputs from the tools also become valuable appendices in your business case to support your recommendations.

The tools are roughly two types: high-level and detailed; we recommend you start with the high-level techniques. Detailed explanations of the techniques are beyond the scope and space for this article.

  • 5 “Whys” 
  • Mind Maps 
  • Fishbone Diagrams
  • Process Diagrams
Once we have discovered the most likely root causes, it’s time to get detailed measures of those areas. The following techniques help analyze the measures:
  • Interrelationship Diagrams
  • Pareto diagrams/li>
  • Scatter diagrams

The act of defining a situation first before rushing to a solution is a powerful aid to developing an effective business case. It can overcome the temptation known as “jumping to a solution” and prevent some of the problems we covered in Part 1 of this series, such as unclear project scope, scope creep, re-work, cost overruns, delays, etc.

Once an agreed on situation is established, it sets the stage for analyzing why the situation exists. We discussed the Analysis stage of SARIE and showed a number of useful techniques that are useful in analyzing problems or opportunities. It would be difficult to explain them all here, so we leave that to other sources if you are interested in learning more.

The series continues in Part 3, where we cover the R and I stages of SARIE next.

© 2011, Richard Larson and Elizabeth Larson