BCD exam

Business case

A structured justification for an IT investment linking strategy, benefits, costs, risks, stakeholders, changes and decision options; used to initiate, monitor and evaluate projects.

Benefits management

The process of organizing and managing so that potential benefits from IS/IT use are actually realized.

IT portfolio

the set of existing and proposed IT investments, apps, infrastructure and projects managed together to optimize alignment, value, risk, resources and timing

Benefit owner

The business stakeholder responsible for realizing and measuring a benefit; IT enables but does not own realization.

Risk

An uncertain event or condition that, if it occurs, has a positive or negative effect on project objectives.

Real option

A right, not an obligation, to take a future action such as delay, expand, contract, abandon, switch or stage an IT investment.

Strategic Grid purpose

Classifies IS/IT applications by current and future strategic impact into four quadrants to guide decisions.

Strategic quadrant

Critical for future strategy/public value; invest, scale, protect, assign senior sponsor.

High potential quadrant

innovative but uncertain future value

pilot, prototype, stage funding, abandon if evidence is weak

Key operational quadrant

essential for current operations
maintain, upgrade, reduce operational risk, ensure resilience

Support quadrant

Useful but not strategically critical; standardize, outsource, cut cost, retire.

Four benefit types

Observable, measurable, quantifiable, financial.

Observable benefit

Judged through agreed criteria or expert judgement (e.g. citizens perceive the city as more responsive).

Measurable benefit

Can be measured after launch but the improvement cannot be reliably forecast in advance (e.g. satisfaction score).

Quantifiable benefit

Improvement can be forecast numerically (e.g. predicted 20% fewer manual permit hours).

Financial benefit

A financial formula expresses the benefit in money (e.g. reduced overtime or maintenance costs).

Benefits Dependency Network (BDN)

Links drivers to objectives to benefits to business changes to enabling changes to IT/IS enablers.

Business changes

New ongoing ways of working required to realize benefits (e.g. staff use new dashboards/workflows).

Enabling changes

One-off prerequisites for business change or go-live (e.g. training, data migration, installing sensors).

Core benefits principle

Benefits come from organizational change, not technology alone; a system can be delivered yet still fail as an investment.

Ward and Daniel cost categories

Purchase, internal development, infrastructure, business change, ongoing costs.

TCO

Total Cost of Ownership
all lifecycle costs: acquisition, implementation, operation, support, maintenance, termination

ROI formula

(Benefits − costs) / costs

ROI above 0 means return exceeds cost, but must be paired with assumptions and risk analysis.

Nelson four mistake categories

People, process, product, technology.

Nelson key insight

Technology is rarely the main cause

process and people mistakes dominate.

People mistakes

Weak stakeholder management, no user involvement, weak personnel, ignoring politics, insufficient sponsorship.

Process mistakes

Poor estimation/scheduling, insufficient risk management, poor planning, shortchanged QA, poor requirements.

Product mistakes

Scope creep, feature creep, gold-plating, research-oriented development.

Technology mistakes

Silver-bullet syndrome, overestimated tool savings, switching tools mid-project.

Risk vs uncertainty

risk = known unknown with assessable probability
uncertainty = unknown unknown that cannot yet be assessed

PMBOK risk process

Plan, identify, qualitative analysis, quantitative analysis, plan responses, monitor/control.

Threat responses

Avoid, mitigate, transfer, accept.

Opportunity responses

Explore, enhance, share, accept.

Mitigation vs contingency

Mitigation reduces probability
contingency reduces impact if the event occurs.

Risk exposure

Residual risk remaining after mitigation and contingency

Risk register contents

ID/description, source, probability and impact, rating, owner, response category, mitigation/contingency, residual status.

Expanded value formula

Static NPV + option premium

Real option types

Defer/wait, stage, expand, contract, abandon, switch, learn.

Decision vs chance node

Decision node (square) = choose the max value; chance node (circle) = expected value of probabilistic branches.

Backward induction

Solve the decision tree from the end back to the first decision node.

EMV

expected monetary value

sum across all outcomes.

ethics in this course

about values, dilemmas, stakeholders, power and consequences when technology affects people.

Kant

categorical imperative do not treat people merely as means — relevant to citizen data and consent.

Habermas

discourse ethics

legitimacy requires inclusive, power-balanced dialogue among all affected parties.

Smart city ethical issues

Privacy/surveillance, bias/conflicts of interest, data ownership, digital divide, transparency/accountability.

Green IT and CSR

Environmentally friendly IT treated as a profit-driven CSR real option; triple bottom line (economic, social, environmental).

GenAI Divide

gap between high AI adoption and the small share of firms getting measurable PL value.

GenAI core barrier

The learning gap — systems do not retain feedback, adapt to context, or improve over time.

Shadow AI

Unofficial employee use of consumer AI tools outside IT governance; shows demand but creates data/compliance risk.

AI business case focus

Process-specific integration, learning, governance, feedback, measurable outcomes and change management — not the model itself.

Service procurement (Wynstra)

Harder than goods procurement due to intangibility, heterogeneity, inseparability, perishability and buyer uncertainty.

IT governance CSFs

Strategic alignment, senior management support, clear roles, communication, performance measurement, risk/value balance, change readiness.

Fintech and real options

Volatile environment (regulation, adoption, tech); staged/wait-and-see investing preserves flexibility; use decision trees when market data is scarce.