Building a Business Case

Building a business case for change is an interesting thing. Through the years I've seen many approaches and been involved in developing scores of cases.  I've seen business cases that were literally two page word documents, and another that was a 50 page PowerPoint presentation with one hundred pages of backup documentation and excel spreadsheets that proved a 7 year internal rate of return of 13.5 % with detailed cash flow analysis and a 6.5% cost of capital. Of course, I've seen everything in between.

 The first one I ever took the lead on with a client was particularly interesting. They wanted to integrate the company's mission statement into the presentation. Perhaps it was because it came out of the HR department, but it was creative, and in the end the case was approved. The reality is that business cases are a very personal thing (if you believe corporations are people too). 

There are as many business case types, templates and approaches as there are people to approve them. They definitely differ significantly from company to company. It's why it's very difficult to give a prospective client a price range when I am asked what it might cost to help develop and prepare a business case.

While business cases differ, I believe they should all have a common approach and core components. While the order and details will change from company to company, the basic outline remains the same and I believe should follow this basic structure:

• The Case for Change – Why is the status quo not an acceptable option?
• Presenting / Evaluating the Alternatives - What options were explored?
• The Selected Alternative – What has the team determined as the best option?
• Making the Case for the Selection:
  • The Financial Case
  • The Non Financial Case
• Implementation Plan
• Corporate requirements such as: Capital Appropriations Request, Procurement requirements, etc.

Over the coming weeks I will dive into each of these business case components and give some ideas on my approach to each. As I do, I will update this posting to links for each follow up posts. I welcome discussion and knowledge sharing. By all means, I do know there are multiple ways to approach this and would love to hear your opinion!

About the author - Donald Glade is president and founder of Sourcing Analytics, Inc., an independent consulting firm specializing in helping companies optimize their HR / benefits / payroll service delivery through financial analysis, relationship management, and process improvement.