Sunday, March 10, 2013

“Why” & “What” Should Be Included In A Business Case?

Executives are going to make a decision about a business case based on the "why" not the "what."

A business Case provides the description and reason for starting an initiative: Many times we’ve seen business cases that are verbose and rarely read. Others are nothing more than Excel worksheets that contain a preponderance of clever macros and pivot tables. Or some still are written on the backs of envelopes and articulate very little. As a decision maker, what do you think the minimum contents a business case should include?

1.   Assess the “WHY”

Well articulate the reason for starting an Initiative, at minimum content, a Business Case provides the description and reason for starting an initiative to articulate and align with VSSP (Vision-Strategy-Structure-People& Processes). These are the principal justifications behind undertaking the initiative

  • Key Business Drivers – what are the key drivers behind this project? What problem or event is driving the need for the project? What immediacy does this problem or event have and why does it need to be addressed now? What is wrong with maintaining the status quo? What impact are these problems currently having (either to the organization or the community)? Can the impact of these problems be measured and quantified and if so what is the quantum of the problems., etc. 
  • State Check: What is the current state? What are the concerns with the current state (costs, inefficiencies, top line impacts etc)? What is the proposed state? What is the cost, time; other resources needed to get to the proposed state? The financial impact of the proposed state (in terms of ROI or the IT expense ratio) 
  • Strategic Alignment – How is this project aligned with the strategic business objectives of the organization? What sort of contribution is the project expected to make to the strategic business outcomes being sought by the organization? What stakeholder support does the project have? Who is the senior executive who wants to take ownership of the outcomes from this project?  
  • Benefits and Outcomes – Which benefits will be achieved through addressing the key business drivers? Can these business benefits be measured and quantified? What outcomes can the project sponsor expect to achieve through investment in the proposed initiative? (a) the KPIs of the business case / project be clearly articulated and that (b) a framework for subsequent benefits management be included ( for a 3 or 6-month post completion assessment).  
Executives are going to make a decision about a business case based on the "why" not the "what." Though business cases tend to focus too much on the "what" (the solution, in particular, the technology solution) and don't place enough focus on the "why" (understanding, qualifying and quantifying the problem and outcomes., etc.). 

2. Describe the “WHAT”

In this step, focus on what the proposed initiative will be doing, In essence, it must deal with cost / revenue / regulatory /or risk. A good business case will demonstrate some measure of ROI, ROA, or ROE. if addressing in a business case for business improvement and technology-related projects. “What” can include both from a business perspective and from a technology perspective.

  • Business Changes – what business changes need to be made in order to address the key business drivers identified in the justification? What benefits will these business changes deliver? What changes are needed to organizational structure, roles, and responsibilities, policies, process and work instructions? What changes will be needed from external stakeholders? How will the changes be communicated and implemented?  
  • Technology Solutions – what IT tools or systems will be needed to support the business changes? What changes to existing systems will be required? What new tools and systems will be needed? Is there an opportunity to leverage new technologies to enhance business changes? How will these solutions contribute the achievement of the business objectives and business benefits of the project? What solution options are available that will meet the business need and which option is the best option? Is it one solution or multiple solutions that will be required? Which solutions represent best value-for-money in terms of achievement of the business outcomes? 

  • What are Content and Context in Business Cases
    1. Problem context - What's the current state 
    2. Market state, Opportunity, Market Segmentation 
    3. Business Options 
    4. Financial Comparison 
    5. Pros and Cons 
    6. Direct Risks and Mitigation
    7. Alignment to the Org directions/ Vision
    8. Change management impacts to the organization 
    9. Implementation Schedule 
    10. Costs/ Financial summary 
    11. ROI timeline 

  • Further Context Subject to Flexibility of who the Audience are:
    a) Background information
    b) Context - Problem definition
    c) Solution options and which solution option is most aligned with the strategic goals of the business
    d) Viability projections of the solution over a period of 5-8 years covering the ROI and NPV
    e) Risks and issues associated with the solution
    f) A list of stakeholder departments that may be impacted by the Change.
    g) Stakeholders who may be requested to approve the Business Case for next steps and next steps itself. 
In looking for a "standard" format, there may not be one. It’s hard to be prescriptive with the size of the document, however, 'less is more' should be the default mantra which requires clear thinking and demonstration of the ability to synthesize and communicate effectively


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