How to write a business case that gets funded: Part II

In Part I of How to write a business case that gets funded, we covered the first three steps:

  • Step 1, Problem: Describe the performance problem.
  • Step 2, Complication: Find an acute reason to change.
  • Step 3, Full Potential: Aim for the best performance possible, not just better.

In Part II, I will cover the next three steps to writing a business case.

Step 4, Diligent Decisions: Create and choose alternative solutions

Every problem has multiple solutions. You have to find the right one. Right means the alternative that delivers the operating performance that reaches (or moves you towards) full potential -- as cost effectively as possible.

Picking the first solution offered (or, more likely, pushed at you) will not achieve this. So, always look at a minimum of three alternatives including:

  • Minimum: What's the least (and lowest cost option) you can do?
  • More: Which option offers an improvement, at a reasonable cost, yet moves you towards full potential?
  • Most: What's the ideal solution?

Compare each option to the most stubborn competitor of them all -- keeping the status quo and doing nothing.

Step 5, Spreadsheet Safety: Design and build a reliable financial model

If you can make sense of the typical spreadsheet at all, most business case or ROI spreadsheets have errors. They are often built on shaky assumptions and wishful thinking, rather than rigor and realism.

Business cases shouldn't start with hacking a spreadsheet together in a few hours. Think through the logic of your case first and design the financial model thoroughly. Buying an ROI calculator from a technology analyst (without full understanding) is no more a business case than a spreadsheet forecast of revenue is a business plan.

Two big causes of spreadsheet problems are, first, lack of design (can you find the key outputs and numbers in under two minutes?) and, second, lack of independent review and checking.

Step 6, Top Line: Quantify impacts and value benefits

Many new projects, products, or services have technology at their root. Too often though, technology projects disappoint or fail. Much woe comes from not building  a credible top line of benefits or incremental revenue for each technology investment.

This boils down to bad business cases.

Technology derives its value from its impact on processes. So, for every technology-based project, product, or service analyze its impact on business or technical processes. Then, convert these impacts into financial benefits using the best information available. On valuing benefits, look for a market price (or proxy) first. If no market prices are available, you will need to let your inner economist lose and think about what the users of the output from your initiative would be willing to pay.

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