A model business case justification

Building Operating Management, Nov 1998

When It Comes to Justifying Mission-Critical Projects, Do It in Terms Senior Managers Understand - the Bottom Line

AN OUTAGE CAN LEAVE AN INTERNET service provider explaining to customers why they couldn't access the World Wide Web or their e-mail accounts. Network failure for a telephone company renders useless thousands of telephones, fax machines and computer modems. Software failure at a bank can leave customers unable to withdraw or deposit money from ATMs.

Real-life events? Yes.

Embarrassing to the companies involved? Certainly.

Damaging to the financial health of a business? Undoubtedly.

Each instance demonstrates what has happened to companies that for whatever reason didn't have appropriate backups built into mission-critical facilities. While anyone can recognize the need for certain projects, such as expanding interior office space, it is the responsibility of the facility executive to point out and explain weak points in mission-critical infrastructure that could wreak havoc on a business. But simply calling attention to trouble spots is not enough. Facility executives have the unenviable task of justifying high-dollar projects that are necessary to their businesses but aren't understood by top managers who decde whether those projects get done.

In most cases, the chief financial officer or company president, who ultimately has the final say on a project's worthiness, either doesn't understand the complexities of mission-critical facilities or assumes a facility's infrastructure will always operate smoothly.

It's the facility executive's job to make them see otherwise.

A facility executive who wants to ensure the safe and effective operation of a business is charged with selling expensive projects up the chain of command. One way to accomplish that task is to use a model that will help senior management understand the risks of not approving expenses on a mission-critical project. The model, called a business case justification, is geared at explaining the need for mission-critical projects in terms senior management understands.

The Dilemma

Many conditions conspire to make selling mission-critical projects a difficult process. First of all, spending money on facilities in the 1990s is not in vogue. Capital spending has been minimized and new techniques for managing facilities are being used to make the assets more attractive on a firm's balance sheet. For example, companies have started to use synthetic leases, an asset management tool that gives the cost benefit of leasing and the capitalization of owning.

Second, mission-critical facilities have a natural "techiness" to them, and this tends to be both intimidating and complex to the uninitiated. There is often a lack of empathy by senior management for critical management information systems and the depths to which those systems reach in a business. Senior managers also assume that mission-critical facility infrastructure will always be available; they don't understand that effective facility management requires a skilled staff, keen planning and a high degree of control and organization.

Third of all, facility executives have a reputation of maintaining mission-critical facilities even in the most extreme conditions - to make do, so to speak. Even as those substandard facilities are becoming increasingly obsolete, facility executives keep them operating within mission parameters. As a result, senior managers rarely see problems with the facilities and form the opinion that if it isn't broke, it shouldn't be fixed.

Where to Start

Because senior managers will never approve something they don't understand, the place to start is education. While the management information systems and facilities teams clearly understand the nuances of the company's *technical" and mission-critical facilities, many company executives do not. In the upper echelons of management, mission-critical facilities are all but taken for granted. The first task is to illuminate some of the issues that are the particulars of a mission-critical building and how they relate to the business.

Make the point that businesses are relying on data for communication, decisionmaking and other essential functions. The need and use of data is growing geometrically in everyone's business. Corporate America marches on data, and could scarcely operate without e-commerce, e-mail, group information sharing, data bases, Inter net access and video conferencing.

It's not unusual for a data center outage to have profound effects on manufacturing as inventory and original equipment manufacturer part controls collapse and shipping and sales information becomes unavailable or lost.

Despite the reliance on it, data remains an invisible tool. Most companies don't see themselves as data-dependent. To gain perspective, look back three or five years and see the impact 7x24 information has had on business. For certain businesses such as banks, insurance, finance, transportation, communications and some manufacturers, 7x24 capability is vital and central to their existence. As businesses operate over larger geographic, logistic and customer areas, there is a greater need for interaction and information. Data help facilitate this.