Business Case Development
Prior to committing to any significant change most organisations prefer to understand "the business case". By that they mean some description of the benefits that will provide a justification for moving ahead with the planned change, improvement or investment. The very fact that people ask for a business case implies that some form of financial consideration must be taken but it is often forgotten that drawing up the numbers can sometimes be a case of arithmetic and the manipulation of formulae in a spreadsheet. The real issue is trying to understand what assumptions have been used to draw up the numbers and whether or not those assumptions "hold water". In addition there are often non-financial benefits to moving ahead with changes or investment and these should not be ignored; not everything can be quantified.
Obviously if the organisation is committing to a programme of expenditure or a series of cost reductions the finance department will want to perform due diligence over any numbers and how they affect the organisation as a whole but the source of knowledge about those numbers is rarely the finance department; it is the managers that want, predict or are enforcing the change.
Managers have a number of techniques available to them to help with building business cases. Zero Based Budgeting and Activity Based Costing are two financial based ones. However consideration should be given to a traditional SWOT (Strengths, Weaknesses, Opportunities and Threats) approach to back up assumptions that are made. The real trick is making sure that those who will read the business case and whose approval is required; see in it the elements that will give them comfort that all issues have been adequately addressed. A manager from HR will want different things to a manager from finance; a front line service oriented manager may want different assurances to a back office processing manager. The questions below illustrate some of the key points to consider.
Increasingly we see that organisations are tackling economic difficulties by restructuring or partnering, sharing services and facilities with non-competing neighbours. The issue of what the business case demonstrates to the stakeholders of all the participating bodies is doubly important in these cases. Sharing is not an excuse for one organisation to ride rough shod over another.
ValueAdding.com has built business cases for many organisations; to help public sector bodies share facilities, to support a strategy of rationalisation in manufacturing businesses and to identify internal cost savings through consolidation.