Business case examplesUnderstanding the RACI matrix

We will now give you 2 business case examples. The first example is one which you might find useful for taking decisions in your personal life. The 2nd business case example is more business focused project.A

Business case example 1: Moving homeRACI

Suppose you and your spouse are considering moving to a new home. You will need to weigh up the pros and cons of moving. This is done using a business case. You might not call it that, but that’s what it is. Let’s look at an example. matrix is a chart that maps out roles and responsibilities for your projects and teams. It is based on a simple acronym: RACI, which stands for Responsible, Accountable, Consulted, and Informed. RACI as a framework is also sometimes known as the responsibility assignment matrix or RAM.

ReasonWhat does each letter stand for in RACI?

As you can see from the example, the first thing to be clear about in a business case is the reason for doing the project or activity. In this example, the couple has answered the question Responsible:Why? These are the people who actually do the work; they are the doers who are completing tasks and creating deliverables. For a task or deliverable, there can be one or more responsible people. In fact, there are two problems here – the local school and John’s long commute.Accountable:

Options considered This person is ultimately answerable for the correct and timely completion of the task or deliverable. It is the only one who approves the work of the responsible people. For a task or deliverable, there can be one and only one accountable person.

A business case should weigh up the competing options which have been considered. After all, there is usually more than one option. Perhaps an alternative option would have been for John to change his job to one nearer their current house. However, this wouldn’t solve the issue with the school.Consulted:

Benefits These stakeholders have a role in providing information, inputs, or advice for the task or deliverable; they are consulted or actively involved in the discussion. But they are not the ones who do the work. For a task or deliverable, there can be one or more consulted people.

The benefits of a project or activity are the positive things you’re going to get back in return for your investment of time and money. In this case, the kids will get a better education, and John will save time each day.Informed:

Timescales These people need to be kept updated on progress and developments for the task or deliverable; they do not have a direct contribution but must be notified of outcomes or major decisions.

It’s also important to understand how long the investment of resources will take. This is so that the organisation (or family in this case) knows when the resources will be freed up to work on other The main goal of RACI matrix is to improve projectsproject efficiency or activities. and communication. Here are some of the benefits of using RACI matrix:

There are usually 2 timescales to consider. First, the timescale of the project or activity – in this case 3 months to find a new house and move there. Second, the time over which the benefits shall be realized. In this case it’s 5 years until the kids leave school.Defining roles

CostsBetter accountability

The costs of doing the project or activity is the next important bit of information. On this project, the costs of moving to a new house will be £5,000. These are the project costs.Smooth decision-making

However, the couple will spend an additional £2,000/year for every year over which the business case is calculated. For a project in an organisation, this is usually referred to as the operational costs of maintaining and operating the projects outputs e.g. an IT system. At this point, the couple knows the total costs over the timescales when the benefits shall be realized.Minimising conflicts and duplications

RisksOptimising resource allocation.

For any activity or project, it’s also important to understand the major risks involved. Risks are the uncertain things which may or may not happen during the period of the investment. There is only one risk identified here, which is the risk that the couple might lose touch with friends who live close to them right now.You can effectively use RACI matrix in the following situations:

Investment appraisalProjects

The next section is where the costs and timescales and risks are weighed up. For this project, it’s a simple decision for the couple to decide if it’s worth spending money over the next 5 years to give their kids better schooling and to save John 2 hours a day commuting. with many stakeholders

For an organisation to decide if an investment is worthwhile, however, there are several different ways in which it can decide about the investment.Cross-functional teams working together

Often in organisations there are rules defined to help business analysts or Unclear or overlapping roles/responsibilitiesproject managersOrganisational change or restructuring write what’s called an investment appraisal. In the next example, we’ll look at one example known as net benefits.New team formation. Assigning a Responsible person.

Business case example 2: Handheld device projectIn practice, the RACI matrix helps

Imagine a heating repair services company that uses a paper-based set of forms filled in by an engineer during site visits. The spare parts required to fix the heater are recorded on a form which is given to staff to process back in the office. They then order the parts, and schedule a follow-up visit for the engineer to fix the heater.project managers

Let’s now look at this example business case.

Executive summaryUpdate the RACI matrix as the project progresses or as changes occur in the team or the tasks.

This sample business case contains an executive summary. This section briefly describes the selected option and the key benefits it will bring.Common mistakes to avoid

ReasonsThe following are some common mistakes to avoid when creating a RACI matrix:

The reasons for the project are clearly spelled out when describing the 3 current problems which the company faces.Including too many tasks or too many stakeholders

Options: Focus on the most important tasks and stakeholders and avoid unnecessary details.

In this example, there are 2 options (other than do nothing) which have been examined. Each option is summarized and the reason why option 3 is the preferred option has been stated.Assigning multiple Rs or As to the same task

Benefits: This can create confusion and conflict over responsibility. Ensure that each task has one and only one A and at least one R.

The expected benefits of reduced overheads are clearly stated. Benefits should be measurable and quantifiable. That means that the benefits can be measured later. But what about the reduced errors, rescheduled appointments and customer contract cancellations? Aren’t they benefits?Not getting buy-in from the stakeholders

Well, these are in fact something else – they’re called outcomes. Outcomes are the results of the changes which come about by using the new handheld devices. The ways you measure the improvements resulting from these outcomes are known as benefits.: Ensure that all the stakeholders agree on the roles and responsibilities assigned to them or to others.

Dis-benefitsNot updating the RACI matrix

This example also contains a dis-benefit which is that the back-office staff morale will be lower due to reduced overtime payments. A dis-benefit, if you’re wondering, is a negative consequence of a project. It’s not the same as a risk which implies something uncertain. A dis-benefit is something which you know will happen because of the project and it has negative consequences for the organisation. It’s the opposite of a benefit!: The RACI matrix should be a living document, not a static one. Review and update it as needed.

TimescalesNot using the RACI matrix consistently

Just as we saw in the previous example, the business case contains 2 timescales – the project timescales (i.e. the time it will take to complete the project) and the benefits realization timescales (i.e. the time over which benefits are expected to be realized).: Ensure that all the team members use the RACI matrix as a reference and respect the roles and responsibilities assigned.

CostsRACI matrix templates and tools

Again, there are 2 costs – project costs and the ongoing operational costs over the benefits realization timescale. When the decision is taken whether to invest in this project, the total costs (i.e. project costs and ongoing operational costs) are weighed against the expected benefits over the same time period.A RACI matrix can be created using different tools and templates. Here are some of them:

RisksSpreadsheet software

One major risk has been identified in this example, but on your project, there could be many risks.: You can use a simple Excel or Google Sheets template to create a RACI matrix, which allows you to customise and format the chart.

Investment appraisalProject management software

The final section is the investment appraisal. The investment technique used in this example is called net benefits. As you can see from the table, the project and operational costs are recorded for each year of the investment.: Many project management tools, such as Monday.com, offer built-in RACI matrix features, which allow you to create, share, and update the matrix along with other project elements.

The project lasts 1 year which is why the project costs are zero after year 1. Of course, the benefits won’t be realized until the solution is in place and the company starts to use the handheld devices.RACI matrix software

The net benefits are simply the total benefits minus the total costs. This shows that the company will start to get a return on its investment sometime towards the end of year 2. This knowledge is vital if the decision-makers are to take a sensible decision about whether to invest in the project.: There are some specialised software that focus on creating and managing RACI matrices, which offer advanced features and integrations.

Business case templateVisual collaboration tools

1. RACI charts es or programme management strategies?
2. Is the tablish clear project planlines of communication aligned with the business case? (e.g. are the costs and timescales in the project plan correctly reflected in the business case?) by identifying who needs what information and when, Minimising unnecessary meetings and emails, clarifying decision-making processes, and ensuring all relevant parties are consulted.
3. Facilitate discussions to resolve conflicts by reviewing the project scope and objectives, clarifying role definitions and expectations, considering team members’ skills and workloads, making necessary adjustments to balance responsibilities, and documenting and communicating any changes.
4. Is it clear how the benefits will be realized?Team members should have regular discussions about their RACI roles to avoid misunderstandings and encourage collaboration.
5. Is it clearly defined what will judged a successful outcome?RACI and Agile project management
6. Is the preferred business option clearly stated, along with the reasons why?Although RACI is a common tool in the traditional project management, it can be adapted and integrated with
7. If the project requires external procurement, is the preferred sourcing option stated, and why?Agile methodologies
8. Is it clearly stated how any necessary funding will be obtained? as well. Here are some tips on how to do that:
9. Does the business case include non-financial, as well as financial criteria?Use RACI for high-level project roles and responsibilities
10. Does the business case include operations and maintenance costs and risks?Adapt RACI for each sprint or iteration
11. Does the business case include project costs and risks?Focus on team roles instead of individual assignments
12. Does the business case conform to organisational accounting standards (e.g. break-even analysis and cash-flow conventions)?Incorporate RACI discussions into sprint planning and retrospectives.
13. Are the major risks faced by the project explicitly stated, together with any proposed responses?

• is Responsible for facilitating the Scrum process and addressing impediments.
• Project and operational costs;The Development Team is Responsible for delivering potentially shippable product increments.
• Project and operational timescales;By using RACI in Scrum, teams can achieve a balance between structure and flexibility.
• Benefits, expressed in measurable terms;RACI matrix variations and alternatives
• Investment appraisal (or cost benefit analysis);In addition to the standard RACI matrix, there are several variations and alternatives that can be used for specific project needs. Here are a few examples:
• Major risks and their mitigation plans;RASCI (adding the ‘supportive’ role)

How long is a business case?Supportive

A good business should be long enough that it contains all the information needed for the decision-makers to take an informed decision about whether to invest in the project. That means, remove any waffle, and only include information which helps decision-making.: People who support the Responsible person in completing the task.

What’s included in a business case?This could be useful for

The following are the most important items to put into a business case:projects

• Executive summary – summarizes the key points; that have resource needs and specialist help.
• The reasons for the project (answers the question ‘Why are we doing this?’);CARS (Communicate, Approve, Responsible, Support)