a document or presentation in which you compare multiple alternatives and propose a single course of action that creates the most value.
business case
A business case is useful when you want to:
- Demonstrate the organizational benefit of a proposed product or service
- Prioritize projects within your group and identify which ones to eliminate
- Show the value of a product or service to a customer to make a sale
- Obtain additional resources for a new project or initiative
- Modify an existing offering
- Invest in a new capability, such as a software program or training
- Decide whether to outsource a particular function
The development process
- Define the opportunity. Describe the situation and the business objectives your proposal will impact.
- Explore options. Brainstorm multiple approaches and choose three or four to analyze.
- Analyze alternatives. Examine how your options will affect the business objectives and choose one to move forward with.
- Assess risk. Evaluate how you will mitigate risks associated with your recommendation.
- Create an implementation plan. Identify, at a high level, how you will achieve your goals and who will be accountable for each milestone.
- Present your case. Create a document, a presentation, or both, to sell your recommendation to decision makers.
Steps for Defining the Opportunity
- Identify the Problem
- Craft an Opportunity Statement
- Identify Business Objectives
- Prioritize & Narrow Objectives
- Assign Metrics
When drafting your problem how should you address it?
in crafting an opportunity statement
address the situation as an opportunity rather than a problem
What are the sample metrics?
- Financial
- Non-financial metrics (Customer satisfaction & Reduce employee turnover)
- Time
- Quality
- Work Habits
- Employee Development
What are common pitfalls?
- Having a limiting mindset
- Having a strong preference for a particular solution
- Failing to consider the status quo
Who should be included in the core team?
- Financial representative
- Stakeholders
- Customer-facing team members
- External Experts
What are parts of a brainstroming session?
- Look outward for solutions
- Avoid constraints
- Think broadly
- Keep your options open
Common financial metrics
- Payback period
- Return on Investment
- Net Present Value
The time it takes before an investment pays for itself; the length of time needed to recoup the cost of an investment.
Financial Metric
Payback period
A financial ratio measuring the cash return from an investment relative to its cost for a stated period of time.
Financial Metric
Return on Investment
The economic value of an investment. Because of the time value of money, to express the investment’s future earnings accurately in today’s dollars, you must discount it significantly.
Financial Metric
Net Present Value
Steps for Analyzing Alternatives
- Identify the costs of the investment
- Identify the revenues of the investments
- Identify Cost Savings
- Identify impact on the bottom line
- Map timelines for costs & revenues
- Evaluate unquantifiable costs and benefits
What captures positive financial outcomes and nonfinancial advantages, as well as negative financial outcomes and nonfinancial disadvantages.
Pros and cons table
Steps for creating an Implementation Plan
- Determine your Milestones
- Communicate with decision makers
- Identify resources
- Clarify responsibilities
- Estimate payoff dates
- Track results
