Declining trend on the public business case: Think before you begin no longer necessary?
By Ed van Doorn & Joeri Olierook
Society is changing faster and faster, as we all see around us. Is your organisation changing fast enough? Is the technical basis for this change in place? Is digitisation the solution to my employee shortage? Making choices is necessary, not everything can be done at once, how do I ensure a successful digital transformation? Large long-term transformations in the public sector have a low success rate or are not always successful. From experience, we know how digital transformation can succeed for your organisation. In this blog, Ed van Doorn and Joeri Olierook highlight some findings based on AcICT's advice in recent years. Remarkably, in the past year, the focus on the risk aspect business cases has decreased and the number of findings on good procurement practices has increased. How do we explain this from our digital transformation practice?
What is a business case for digital transformation?
Digital Transformation is, of course, a comprehensive term. As far as we are concerned, Digital Transformation is "an organisational change in which information technology, processes and competences can be managed in conjunction". In our consulting and realisation practice, we guide countless public and non-public organisations with their Digital Transformation. Processes, human skills, new competences, new technology and solid communication are hereby governed in coherence. This usually starts with a picture of the costs and benefits, in the form of a business case. A business case is nothing more or less than a social or business consideration of costs and benefits.
A complete business case, however, contains more than the weighing of costs and benefits for the organisation. A good business case also provides insight into:
- a goal that is sharply defined and clear to everyone;
- benefits and costs, both qualitative and financial;
- all possible scenarios for the change with advantages and disadvantages, and a preferred scenario.
In this way, it helps the organisation make an informed decision about the changes in the coming period, and how. To ensure that the Digital Transformation succeeds, a clear business case is thus an important steering tool for success. Based on the costs and benefits, the organisation can measure, track and periodically adjust the benefits and drawbacks of the transformation.
Notable trends, what is going on?
The Adviescollege ICT (AcICT), formerly BIT, has been reviewing public projects with an ICT component larger than €5 million since its inception. Our VKA trend analysis shows that this year fewer risks have been seen in the area of 'Business case, benefits and financing'. At the same time, we actually see an increase in the 'Principal and project organisation' aspect. From VKA, we find this remarkable. See figure 1.
Figure 1: decreasing number of comments on the business case, increasing on principalship.
This declining trend for business cases can, on the one hand, be explained by the fact that the importance of the business case may be declining because decisions have simply already been made in government: it is "a must" like legislation or crisis response. On the other hand, it could of course be that business case thinking in the public sector is now well established. Of course, the reality is more nuanced.
The importance of business consideration or business case remains. That political decisions are not accompanied by desired and undesired consequences is nonsense, even with "musts". We still see that business case thinking is not embedded in public affairs. In particular, we often see cost sheets lying around, without a decent understanding of how to achieve the desired goals using benefit management. So it seems to us that business case thinking is in order. Certainly when one experiences crisis, money will be made available, as in the case of pandemic control, housing shortages and nitrogen problems. Focusing only on costs is then still only half the story.
The importance of good commissioning and adequate programme communication and organisation remains high and is even rising. This is also in line with the situation we are experiencing. This is because society is changing rapidly and technical complexity is increasing with competences to be changed. In a collaborative economy, nothing stands alone and people will also evolve by acquiring new competences. With rapidly changing technologies like data, AI, cloud migrations, the complexity increases, and the success rate decreases. So, that the number of findings increases on this aspect also seems very logical to us.
How to increase our success rate?
Increase efficiency and feasibility by improving the success rate. Always make a business case with balanced costs and benefits, even if it is a must. We are therefore surprised that it seems to get less attention in the public sector. Measure your change and adjust short-cycle. It is not for nothing that the AcICT has included in its current framework the guiding principle that the business case should be periodically reassessed, and ideally used in decision-making during the process. In a fast-changing society, business cases are also changing ever faster. A transformation with a new software system for the primary process can become obsolete due to a social development or new technical possibility. Just continuing with arguments "we have already invested so much" is never enough according to the doctrine of escalation of commitment.
Therefore, govern and recalibrate your business case short-cycle. Of importance here is also to constantly weigh up the possible scenarios. Any changing activity that produces results using a changing capability leads to achieving your goals. They are always trade-offs. Goals have benefits and disbenefits or negative consequences. Do you have those in view? What are you willing to let go of in favour of the goal?
It is therefore good to see that AcICT, despite the downward trend, has decided to devote a knowledge publication to the Business Case [link]. Which just underlines what an important tool it is in the management of large, complex changes!
The publication's subtitle is 'Think before you leap'. Our call is to keep reflecting throughout! This is also what we point out a lot in our programme management and communication practice and our Independent Critical Conscience project review.
It remains surprising that the number of business case comments is falling. We see in practice that "Be careful before you start" is no longer enough. A business case is not just an addition of costs, but is mainly about periodically (short-cycle!) driving your benefits and negative consequences to be managed. In that sense, we understand again that the number of comments on commissioning and project organisation (monitoring scope and governance) does rise.