Cause & Effect Analysis,
which documents the [root] causes and effects of
the problems to be solved
Cost/Benefit Analysis,
which estimates the cost avoidance (or savings),
identifies the benefits, and compares the costs and
benefits.
Investment Opportunity Analysis,
which documents the financial attrativeness of
alternative applications or components (e.g., return on
capital, after-tax rate of return, return on
investment).
Pareto Analysis,
which identifies the most important factors
impacting the success (i.e., critical success factors) or
failure (e.g., major risks) of the proposed
solutions.
Payment Analysis,
which documents the number of time periods required
to recover the investment in the proposed solutions.
Sensitivity Analysis,
which documents how sensitive important values
(e.g., profit, return on investment) are to minor changes
in input parameters.
Trend Analysis,
which trends in important values that affect the
decision on whether or not to develop the proposed
solutions.
Value Chain Analysis,
which documents the impact (via a decision tree) of
the proposed solutions.
Clearly and convincingly summarize the business
justification in the executive overview.
Document alternatives because decisions can only be made
relative to alternative choices.
Where practical, use money (e.g., present value) as a
common denominator to avoid “comparing apples with
oranges.” For example, quantify tangible benefits in
monetary terms.
Be conservative with the finanical numbers to avoid being
discredited for being overly optimistic.
Where practical, consider both quantitative and
qualitative factors. Use qualitative factors to make choices
when quantitative factors are close.
Where practical, use ranges of cost and benefit
estimates.
Focus on the business issues, rather than the technical
issues.
