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Building Accurate, Credible, and Compelling Business Cases: Strategies for Success

This comprehensive guide by KGW Consultants Ltd. delves into the common pitfalls that lead to business case failures. It emphasizes the importance of strategic alignment, evaluation of alternatives, and thorough risk analysis. The document outlines a structured approach to defining problems and estimating potential solutions, backed by compelling economic justifications. Learn how to effectively present your business case to secure project approval and drive organizational success, while considering both soft and hard benefits.

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Building Accurate, Credible, and Compelling Business Cases: Strategies for Success

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  1. Building Accurate Credible& Compelling Business Cases KGW Consultants Ltd

  2. Why do Business Cases Fail? • Not considered strategic • Too much weight on soft benefits • Risks / mitigations not considered • Alternative approaches not evaluated • Errors in Business Case • Wrong solution or solution-driven

  3. Business Case Process

  4. Business Case Process

  5. Problem AnalysisCase for Action • Create clear problem / opportunity definition • Why resolve? • Is it strategically aligned? • Is it financially justified? • The “safety / regulatory” myth

  6. Problem AnalysisCase for Action How much is it worth to solve? • How much of the problem needs to be solved? • Consider costs, benefits, time, risk • Model entire Risk Range • Problem: Lowest through Likely to Highest Costs • Opportunity: Lowest through Likely Benefits • Cost & benefits adjusted for time, risk / probabilities • Time-based: Payback, ROI, NPV, IRR • Risk-adjusted: PVP, ANPV • Sensitivity analysis

  7. Problem AnalysisNon-Economic (soft) case • Economics leads – others support the case • Try to quantify • Keep trying • Distinguish features from benefits • Consider: • Regulatory – cost of non-compliance • Safety – historical hard costs / estimates help • Improved Business positioning – estimate $ • Customer satisfaction – estimate value • Try again – don’t be afraid to estimate

  8. Case for ActionEstimation “Estimation is concerned with the prediction of uncertainties. It is more dignified than fortune-telling, though not always more accurate” ….unknown

  9. Business Case Process

  10. Identify Alternatives • Brainstorm multiple alternatives • “Do-nothing” • “Shut down” • Partial solutions • Full solutions

  11. Business Case Process

  12. Evaluate the Alternatives • How long is it feasible? Buy time? • Strategic implications • Consider probability of successful outcome • Good enough?

  13. Evaluate the Alternatives • Differentiate the solutions: • Economics • Cost & time • Risk • How well does it align with strategy? • Opportunity costs? • Extras • Compare / Eliminate based on problem analysis constraints

  14. Economics

  15. Business Case Process

  16. Build Case Outline • Build outline to suit purpose • Consider: • Executive Summary • Problem Definition • Alternatives • Risks • Financial Case • Soft Case • Recommendations • Post-project Audit Plan

  17. Structure & PresentationKey Points • Use plain english • NEVER use corporate or industry specific acronyms • Consider future readers (shareholders, auditors, etc) • Lead with an economic case • Identify the funding source • Avoid head count benefits (use ABC) • Understand the corporate selection criteria • Show recommendation pros & cons • Know your audience / structure appropriately • Pre-position your case • Know when to fold

  18. Questions?

  19. Success Equation Start with: A recognized quantifiable strategic problem or opportunity + Alternative Analysis + Compelling Economics + Credible Pre-sold Supporters + Identified Funding Source All in a clear, concise, convincing case = An Approved Project!

  20. Handouts Monday at www.kgw-consultants.com

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