Picture this scenario: The Entrepreneur, Business Owner, Department Head (or Head Honcho by any other name) has had a brainwave.
He (or she) has had a nagging problem in the business for so long, and knows solving it is essential for some much-needed growth in the next financial year.
And suddenly, s/he has the solution!
Which is, to buy X software from Y supplier, and have it up and running in-house by Z date.
S/he gathers the troops, and hastily puts a Project Team together. They are instructed to contact the supplier, and start cost and contract discussions ASAP. They forge ahead, in full delivery mode…
…fast forward some months, and what do we have?
Head honcho – with Project Team in tow – are in the throes of a MAJOR software implementation project, and to be honest, s/he can’t remember how they got here.
Or, the software is implemented, fair enough. But the level of under-utilisation is close to being criminal, and the annual running costs will remain a drag on the business’s running P&L for some time to come.
Sound familiar? It certainly does to me!
I’ve been in project teams where the powers-that-be felt they not only knew WHAT the solution to the business problem was, but HOW to get it done, without much (or any!) cost-benefit analysis.
Concerns and recommendations are summarily dismissed, at least not until a considerable amount of time has passed and costs incurred.
In my opinion, that's the most dangerous threat to a successful project: LACK OF A BUSINESS CASE
And in my opinion, that’s the most dangerous threat to a successful project:
LACK OF A BUSINESS CASE.
A Business Case is the result of doing your research upfront, before you steam ahead, full throttle on that pet project of yours. It’s easy to develop an emotional attachment to a project, especially if it was your idea! But assessing the feasibility and producing a Business Case will force you to put any emotions to one side, and look at the costs and benefits through a purely commercial lens.
Business Cases are at the forefront of my mind at the moment, as I’m in the throes of producing one for a client right now. All the groundwork has been done: I scoped out the project, elicited and validated requirements from key stakeholders across the various business divisions and ran a Request for Proposal (RFP) process to find the solution provider best suited to the client’s needs. You could say this was all part of the process of assessing feasibility.
Now though, I’m taking a step back and weighing the costs and benefits. This will then be presented to my client for approval.
So, what must you include in your Business Case?
Explain WHY the project or solution is needed: Don’t assume that everyone has the same background to it that you do! Bringing them up to speed may seem like a waste of time, but it’s worth investing the time to make sure everyone is at the same level of understanding. Give them some context of the business problem to be solved.
Summarise WHAT the solution is: As well as explaining this, take people on a short journey of how you arrived at this decision. What other alternatives were considered? (And remember that “Doing Nothing” can be a reasonable option, with its own costs and benefits attached). Why were these alternatives dismissed, and why is the option being recommended the frontrunner?
WHAT are the costs and benefits?: I’m not even going to sugarcoat it, folks. This is the most important part of your Business Case, and the most trying to put together! (Especially, if like me you get a little cross-eyed when playing with numbers ). You’ve got to assess, not just what the immediate, one-off costs are, but there will be ongoing costs to take into account (for example, for software there will be annual licensing and support costs). Then, you’ll need to determine the financial benefits. Don’t overstate these; be realistic! There will be non-financial benefits too, such as ensuring compliance with industry regulations, or gaining a competitive edge in the marketplace; be sure to state these too. Your cost-benefit analysis will have to contain assumptions, as you’re unlikely to have every single relevant piece of information when you start out. But again, I’d suggest you err on the side of caution. As a friend of mine says, better to under-promise and over-deliver!
What are the costs & benefits? Better to err on the side of caution with assumptions: under-promise & over-deliver!
HOW will it impact your business?: Any kind of change will have an impact on your people, processes and technology, and it’s best to be prepared. So, do your teams need some training in preparation for the new system? Do your processes need to be adapted or re-engineered?
WHAT are the risks attached to implementing the project?: With all changes there will be risks; there’s nothing you can do to prevent that! What you CAN do is assess the risks – for example, how likely are those risks to occur? If they do happen, what will the impact be? – mitigate them and assign each one to someone who can manage them properly and give them the attention they need.
WHAT is your recommendation?: At the end, don’t forget to clarify the course of action you recommend, and the decision you need taken. Is that approval by the Board, or approval of your budget by the CFO? I also find it useful to summarise my Next Steps, so your key stakeholders have a clear view of what will happen next.
So there you have it. It takes some work, but it’s making this investment upfront will stop you ending up with a white elephant later.
And if you need support with your Business Case I’d be happy to help! Do get in touch here.