Issue link: https://industrialmanagement.epubxp.com/i/656209
12 Industrial Management approach to business case development. In fact, KPMG reports that almost half of all organizations prepare business cases for all projects. This makes a variety of styles and approaches possible. Some enterprises require a formal presentation, a report, the completion of a template or some other protocol. Despite no universal standard, Figure 1 encompasses the important aspects of the business case. Executive summary, background, reason and options: The executive summary should be brief and deliver the salient points of the business case. It should summarize the objectives, benefits and recommendation and can, if appropriate, be presented in bullet points. The background should paint a picture of the business context and the current state or "as is" that relates to the challenge at hand. Reason explains and addresses the need to achieve some alternate future state and goal. What is the business issue, challenge or problem being addressed? The scope, which describes what is being considered and what is not being considered, should be explicit. Because businesses do not operate in a vacuum, the business case should address how the case fits within the business strategy. For example, if the business case proposes to implement Six Sigma, it could address strategic objectives linked to operational improvement and quality. Sometimes problems have obvious solutions, but other times there is substantial ambiguity about the correct path. The business case provides a mechanism to think through various options formally. Without the business case, biases and "gut feel" can prevail in decision- making. As Ross Foti wrote in "Make your Case" for the Project Management Institute: "Executives who lead by their gut find themselves delivering late and over budget and do not meet stake- holder expectations. Without a solid business case, the best project plan often does not support organizational objec- The "do nothing" option always should be considered. tives and will lack commitment." Evalu- ating options forces the writer, the team or the organization to consider options logically. The "do nothing" option always should be considered. For example, if a new federal rule affects environmental, health and safety, pursuing the "do nothing" option could lead to noncom- pliance, fines, prison terms and facility closure – all considered undesirable outcomes. Beyond the "do nothing" option, present two or three reasonable options. The number will depend on the complexity of the matter. Too many options would overburden the decision- making and business case development teams. Suppose each of four options (including the "do nothing" option) has ESSENTIAL ELEMENTS Figure 1. A solid business case should encompass these important aspects derived from IXL Group PLC, KPMG and Sheen and Gallo 2015. ➤ Executive summary ➤ Background ➤ Reason • Scope • Problem to be addressed or problem statement • Business need • Goals • Fit with organizational strategy and plan ➤ Options • Do nothing option • Two or three viable options ➤ Financial, operational and qualitative analysis • Financial costs and benefits – Capital costs – Operating costs – Transition costs – Revenue – Cost savings and avoidance – Option value – Other costs and benefits • Operational benefits – Improved productivity, efficiency, quality • Qualitative benefits • Assumptions ➤ Feasibility, risks and mitigations ➤ Recommendation • Next steps, including other steps that must be taken to achieve the benefits ➤ Timescale and execution • Implementation plan – Governance structure – Milestones and phases – Estimated timing – Resources requirements – Change management effort • Timing of expenditures or investments • Timing of benefits • Critical success factors ➤ Benefit tracking • Baseline metrics – Financial metrics – Operational metrics • Dashboard or scorecard ➤ Request for authorization or approval ➤ Appendix/other • Stakeholder analysis • Process flow charts • Supporting technical reports • Survey results • Benchmarking results • Additional financial analysis scenarios