Why You Need Formal Business Cases for Data Mining
Data mining has costs — costs for software, costs for labor, costs for servers, and perhaps costs to obtain data as well. To justify paying for all of this, you may be required to prepare a business case. A business case outlines a specific business problem, a proposed plan to address it, and the associated benefits and costs.
A business case can help a company or organization’s decision makers understand the situation and come to an appropriate decision. Any type of organization may use formal business cases to support decision making. Publicly traded or large businesses and government agencies generally require them for all significant expenditures.
Business cases can help you, too. Preparing a good business case clarifies your own thinking about plausible goals and your path to reaching them. It documents the reasoning behind your plan. And you can use your business case to set realistic expectations for management and your peers. So, even when a business case isn’t a formal requirement, it’s still a good idea to prepare one for your data-mining program or project.
Satisfy the boss with your business case
You have limits to your authority to set priorities and allocate resources. Almost all data miners answer to a supervisor. Even the self-employed have clients to satisfy. If you want access to a substantial or expensive resource, you’ll need your boss’s approval to get it.
How can you get this access? A business case. Your business case is your means for securing approval (permission and resources) for data mining.
But why go to so much fuss? Your boss knows and trusts you. Why not just tell your boss which option you recommend and leave it at that? It’s all about reducing risk.
You may think a certain approach is the way to go, and your boss may believe you. But your boss has a boss, too, and your boss’s boss doesn’t know you as well or trust you as much.
Neither of these bosses wants to risk a bad decision. If questions arise about why resources were devoted to a particular project (and not to another), or if something goes wrong, they won’t be able to defend their decisions without a documented case. So help them out!
Your boss needs your business case to
Get a thorough understanding of your recommendation and the reasoning behind it
Address the concerns of higher-level managers
Have adequate documentation to address concerns that may come up later
Minimize your own risk with business cases
A business case doesn’t just lower the risk for your boss. It lowers your risk as well.
The process of preparing a business case requires that you devote thought and research to the business problem you want to tackle. You’ll prepare the business case before you begin data mining — in fact, before you commit any resources to the project.
As you do so, you’ll have the opportunity to spot issues that you might not have considered otherwise, questions that your management may ask, and ways to improve on your own ideas.
So when you go to your boss with a real business case instead of just a recommendation, you’ll be more confident and better prepared to defend your recommendation.
Making a business case lowers your risk because
You’ll be more persuasive when explaining you proposal and its benefits.
Some potential problems will already have been identified, and the proposal will include steps to prevent them.
Documentation of the business case will be important if questions arise later. The decision will be based on the business case, not your personal opinion.