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A business case is an influential decision support tool, which presents an accurate, balanced and considered analysis of an opportunity. What is a Business Case? A business case presents a compelling customer focused analysis of an opportunity for the purpose of supporting and influencing decision makers. key business case elements include:
Address the Audience As we will discuss later in part three of this course addressing your audience is pivotal to the success of the business case. Prior to commencing the preparation of the business case you must determine who will be reviewing the document and what are their specific business concerns. Communicating the Purpose Whilst it is generally assumed that the purpose of a decision case is support or influence decision-making, you should still clearly state the purpose of the document. Typical purposes make include analysing timing, budgetary or methodology issues. Defining the Scope Unless the scope of the business case is clearly articulated readers have a tendency to make assumptions about inclusions and exclusions. Clearly defining timeframes, functions and complex considerations such as technology is critical to avoiding misunderstandings. Selecting Appropriate Financial Metrics At the heart of most business cases is the underlying financial analysis. Most readers will want to know the bottom line figures prior to examining all of the detailed financials figures and workings. Accordingly the business case should set out what financial metrics (measures) have been used.
Regardless of the measures chosen the business case should specify whether or not the figures presented represent full cycle or incremental valuations. Benefit vs. Strength vs. Feature A tangible benefit is a concrete gain normally expressed in terms of profit or value. An intangible benefit is an abstract gain, either present or predicted, normally expressed in terms of value. Strength refers to a strong point relative to competitors in the same market. A feature is a notable attribute which depending on context may be positive or neutral in nature. Measures The most commonly used benefit measures include:
ROI - Return on Investment can be anything of value (normally financial return) that an organisation receives beyond the amount put into a venture. SOI - Saving on Investment is a product and service comparison model, akin to calculating ROI. TCO - Total Cost of Ownership is a model developed to analyse the direct and indirect costs of product ownership. Sensitivity & Risk Analysis Some aspects of a business case maybe subject to change or have varying degrees of associated risk. Accordingly it is appropriate to outline in the business case how risks have been identified and treated. Recommendations Many self-appointed business case experts suggest that you include as many disclaimers as possible and avoid making specific recommendations at all costs. This is a recipe for business case disaster. A good business case includes concise recommendations that logically follow on from the body of the document and which the author is prepared to standby, |
