Does your Business Case Focus on Value?

We’ve all been there… that morning we deliver the big presentation about the new Software Tech/Tool we want to get. We’ve honed the PowerPoint (see footnote!), rehearsed our killer points, negotiated the lowest possible cost and drafted the best Business Case “of all time”…

Two things occur to us as we wait outside the meeting (1) we spent longer on the PowerPoint than the Business Case and (2) if the wrong person from Finance turns up and starts asking questions about the Business Case, we might be in trouble…

Worse… you get the money but are asked to present a summary of whether the ROI you promised in the Business Case has been achieved at a review in 1 year’s time.

If we’re honest we’d all agree to do that to get the green light but in 11.5 month’s time will you still be so bullishly confident?

I doubt it (I wouldn’t be)

Ready to be shocked?

Forbes reported in 2021 that “technology projects fail at an astounding rate at enormous cost to the companies – and executives – who support them. Perhaps the harshest finding is that “90% fail to deliver any measurable ROI.” [Forbes.com Mar 25, 2021,12:17pm EDT]

So, if you fancy being the 1 in 10 that actually delivers the ROI you promised, what can you do?

KEY MESSAGE: When developing a business case, focus on the VALUE that the proposed initiative will create, rather than just the COSTS involved.

Here are some tips for emphasizing value in your business case:

1. Identify the benefits: Identify and quantify the potential benefits of the proposed initiative, including any financial, operational, or strategic benefits that may be realized. Focus on the long-term value that the initiative will create, rather than just short-term costs.

2. Use a business value framework: Use a business value framework, such as the Balanced Scorecard or the Value Delivery Framework, to structure your analysis and clearly demonstrate the value that the proposed initiative will create.

3. Measure outcomes, not just inputs: Focus on measuring outcomes, such as increased revenue or improved customer satisfaction, rather than just inputs, such as the number of hours worked or the amount of money spent.

4. Use case studies and benchmarks: Use case studies and benchmarks to illustrate the value of similar initiatives and demonstrate the potential return on investment (ROI) of the proposed initiative.

5. Highlight strategic alignment: Emphasize how the proposed initiative is aligned with the organization's overall strategy and goals, and how it will help to achieve those goals.

6. Consider intangible benefits: Consider intangible benefits, such as increased brand reputation or improved employee morale, which may be difficult to quantify but still have significant value for the organization.

7. …and yes, last of all, apply a sound cost-benefit analysis to demonstrate the potential value of the proposed initiative, weighing the costs against the benefits and demonstrating a positive ROI.

If this all seems daunting, and (like me) the thought of trying to work out how to develop a credible, realistic Business Case is even worse than being told to use PowerPoint, then help is at hand: 

First, ask the Software Vendor. They’ve probably got an off the shelf business case and they’ll be willing (or should be) to let you talk to recent clients to find out if the promises matched the reality (if they suddenly become all coy and elusive, then your alarm bell should be ringing)

Second, seek help from a neutral. Businesses like The Value Search Team specialise in helping both vendors and customers to develop credible, evidence based business cases. More importantly as an extra set of eyes, they will soon tell you whether everything is looking alright…

Of course there is then the obvious one, talk to your business partners and stakeholders. A Finance Business Partner can do wonders for a business case and so can other stakeholders, not least because they will either have past experience of writing them, an interest in this one or both!

However you do it, focusing on value rather than just cost in your business case will not only help you to get the investment but significantly increase the chances of actually achieving the value you promised.

Footnote: A “Pro-Tip” to be that 1in10 – focus your effort on the Business Case not the PowerPoint; 95%/5% as a minimum!

Richard Beaumont, April 2023