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Herbert A. Simon, a Nobel Laureate in Economics, once said, "A wealth of information creates a poverty of attention...". Truer words have never been spoken when it comes to the world of Business Case development. With a surfeit of metrics, data points, and analyses competing for C-suite attention, building a compelling Business Case requires careful selection and powerful storytelling.
Importance of a Solid Business Case
Simply put, a Business Case is the justification for a proposed action based on its expected commercial benefits. This typically comprises an assessment of the business environment, an identification of Strategic Alternatives, a Recommended Course of Action, an Implementation Plan, and a Financial Analysis. While certain elements may vary by company or industry, these five components complement one another to form a comprehensive Business Case.
Identification of Strategic Alternatives
In identifying Strategic Alternatives, it’s critical that these are made in response to a clear identification of the problem or opportunity at hand. As such, the intent should act as the guiding light for any subsequent analysis. Articulating a limited set of compelling alternatives, rather than an exhaustive list, can mean the difference between a Business Case that earns approval and one that languishes in the evaluation phase.
Recommended Course of Action
Equally important is the Recommended Course of Action. One best practice is to associate each alternative with distinct risk and reward profiles, illustrating how each decision might play out under various scenarios. This approach demonstrates careful consideration for Risk Management and can help executives feel more confident in the final decision.
Implementation Plan
A Business Case is only as good as its Implementation Plan. In fact, without a clear roadmap for implementation, even the most promising of plans can fall flat. While developing this section, it is vital to outline the key actions, players, functional dependencies, budgets, and timeframes necessary for successful execution.
Financial Analysis
The Financial Analysis is typically the most quantitative section of a Business Case. It requires a robust understanding of foundational financial principles and the facility to apply them appropriately. However, all too often, Business Cases focus overly on these numbers, obscuring the underlying logic and narrative. Balancing solid analysis with a clear, straightforward narrative can make your business case easier to understand and, ultimately, more persuasive.
Best Practices for Developing a Business Case
A well-structured Business Case has a storyline that weaves together the analysis and conclusions into a cogent narrative. It is not merely a compilation of data points, but rather a justification for a strategic decision. Below are some best practices to consider:
- Start with a clear summary or executive overview that outlines the problem or opportunity, strategic alternatives, recommended course of action, and expected outcomes. This gives a quick snapshot to busy executives and sets the stage for the detailed analysis to follow.
- Use a mixture of quantitative and qualitative arguments. While the financial analysis provides the numbers to support your decision, qualitative aspects such as market trends, competitive position, and Operational Excellence can further bolster your argument.
- Consider using visual aids like charts, graphs, or infographics. These make complex data easier to understand and are also more likely to capture and hold attention. Plus, executives often need to present your Business Case to others, and visuals make it easier for them to tell the story.
- Incorporate a robust risk assessment. Every decision has trade-offs and risks. Demonstrating that these have been thought through and that contingency plans have been developed can earn trust and confidence in your Business Case.
Developing a compelling Business Case is not easy—but neither is the job of the executives who have to make the tough decisions. By making their job easier, focusing on what’s important, and telling a compelling story, you can significantly improve your Business Case’s chances of success.
