Making the Case Part 3: Elements of a good business case
In my last post – “Making the Case Part 2” I established that a “business case is made through the preparation and presentation of a business plan.” We could therefore infer a good starting point in making a business case would be to find a format of a business plan to start building your case. There is plethora of good business plan outlines, how to books, and software tools we could find to benchmark by doing a simple search on the web.
However, using a generic business plan outline as a starting point may prove to be ineffective (it may yield more work than value for you) and worse yet – may not be relevant to the task at hand. Remember that our goal is not to create a fancy document but to go through a defined process of doing upfront homework in making the best case as to why the identified opportunity makes good business sense, and documenting the results for decision makers and a reference source for the project team in the development and execution phases of NPD lifecycle.
Assuming your company has created a go/no-go project decision criteria – I recommend you design the business case template to specifically address the project selection criteria. Typical selection criteria will score an opportunity against these key critical factors:
• Strategic alignment and importance
• Product and competitive advantage
• Market attractiveness
• Leverage core competency
• Technical feasibility
• Financial reward
With the scoring criteria in mind, the business case should articulate the following:
• How the project will enhance our ability to deliver value to our target markets?
• Who needs it?
– Customers job to be done and the value placed on successfully getting the job done
• How much will they buy?
• Why will they buy from us vs. the competitor?
• Can we execute and exploit the opportunity?
– What technology is required to win the business?
• What are the risk and how will we mange it?
• Is there a solid financial case for the investment?
• What’s the optimum path to commercial success?
So while I do encourage you to reference best practice business planning “how-to” resources to help build your planning framework, I recommend streamlining your business case process to fit your NPD idea-to-launch framework and focus your planning activity in answering the critical criteria in making the ultimate decision to “go” or “kill” the project.
In part four of “making the case,” I’ll talk about the level of detailed required to make the case and the characteristics of a good business case.