Framework for Categorizing Financial Benefits PPT

This PPT slide, part of the 32-slide Business Case Development Framework PowerPoint presentation, presents a structured framework for categorizing financial and quantifiable benefits within a business case development context. It emphasizes the necessity for all identified benefits to fit into one of 5 distinct categories, ensuring clarity and focus during financial decomposition and opportunity identification phases.

The matrix is divided into 2 axes: financial vs. non-financial and quantifiable vs. non-quantifiable. This layout helps in visualizing how benefits can be captured either quantitatively or qualitatively. The highlighted area indicates a focus on capturing benefits in a quantitative manner, which is essential for rigorous financial analysis and decision-making.

The 5 benefit categories listed are: Revenue Enhancement, Cost Reduction, Cost Avoidance, Capital Reduction, and Capital Avoidance. Each category is defined succinctly, providing a clear understanding of what constitutes each type of benefit. For instance, Revenue Enhancement is aimed at increasing revenues, while Cost Reduction focuses on reducing existing costs without eliminating them entirely. Cost Avoidance is about preventing costs from occurring, which can be crucial for long-term financial health.

The slide concludes with a directive to categorize financial, quantifiable benefits into these 5 categories. This structured approach not only aids in organizing financial data, but also enhances the overall effectiveness of business case development. By adhering to this framework, organizations can ensure that they are capturing all relevant benefits, thus facilitating better strategic planning and resource allocation.

This slide is part of the Business Case Development Framework PowerPoint presentation.

This capital budgeting business case development framework is created by former McKinsey, BCG, Deloitte, EY, and Capgemini consultants and is commonly used across Strategy Consulting projects. Financial model also included.

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