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Guide to Building a Business Case

(Illustration : XYZ Energy Co.

Based on
HBR Guide for
Building Your Business Case
Business Case Guideline

Tell a Compelling Story to your stakeholders

Tell your audience what to
expect from the

If you are submitting a

document for review and
not presenting the business
case then aptly label the
Executive Summary
Grab the
Attention of

Tell the story

of your
business case
Executive Summary : XYZ Energy
Option C is recommended: as we re-energize Alpha Trading
with a new Summary
product line Alpha
and capture Trading
the youth market
Problem : Falling sales revenue due to obsolete product line , poor
product quality resulting in high sales return and poor customer coverage
in B and C class cities
Option Solution Benefits Profit
A Do Nothing and focus on NCR Protect your Rs14.50 lacs
thru traditional sales channels investments I
B Build a website and continue Sales Rs8.9 Cr (+30%) Rs 24.40 lacs
current product line. Re-org Exp on Dig Marketing
sales team to focus on B and C and IT Rs19 lacs
class cities plus NCR sales return 3% exp
Rs18.5 lacs
GM Rs2.22 Cr, SG&A
Rs1.6 Cr
C Option B + shift to Wong Traders Sales 13.31 Cr,, Pub Rs60 lacs
Rs0.63 Cr , Sales Return
0.5% Exp 4.7 lacs IT
0.31 CR, Sales Comm-
Rs0.13 Cr
Business Need Statement
Establish a sense of urgency for the opportunity
or solution
Business Need Analysis
Flesh Out
causing the
Along with
Business Need Statement: XYZ Power Co

Delivering quality service to our customers achieving a

93% satisfaction rating is our objective. We are not able
to fulfill our obligations
Business Need Analysis : XYZ Energy Co.

Please detail out operational issues at Alpha Trading

Business Need Analysis : Alpha Trading
Operational Issue Root Cause Solution
Falling sales - Youth are No web presence and Deploy website for online
not buying our products obsolete product line sales and tie up with Wong
for the Challenger
Falling sales : Cannot No dealer network in such In addition to website also
address enquiries from cities as well as no online redeploy sales staff from
Ambala, Mathura sales NCR to such cities.
Incentivise sales staff
3 % sales returns are Lucky Traders products Shift to Wong for high
eroding our brand image are inferior and of poor quality products
SG&A expenses at Rs1.61 Sales productivity is low on Increase sales productivity
Cr are cannot be sustained wasted NVA processes by sales incentives, digital
and volume of 10K marketing and
phones/year is too low redeployment of sales
Business Need Statement: Alpha Trading

Our overheads are just too high for the revenue we

Business Need Analysis: Alpha Trading

Project Overview Options
the scope of
Project Overview Options : XYZ Energy Co
Project Overview Alpha Trading :

Eliminate NVA Processes and Utilize Electronics Fund Transfer.

Limited increase in customer coverage
Project Overview Alpha Trading :
Project Overview Alpha Trading :

New Sales Portal + Automated Order Fulfillment: Quantum

Leap in customer coverage
Project Overview Alpha Trading :

New Sales Portal + Automated Order Fulfillment: Quantum

Leap in customer coverage

Lay out a high-level plan for implementing

the project.
Schedule : XYZ Energy Co

a. Describe the benefits. Benefits mainly consist of revenue and

productivity savings (benefits youll achieve through greater
efficiency). In this example, the benefits are productivity
savings gained by reducing the power fluctuations.
b. On this slide, youre only presenting the benefits. In later
slides, youll address the costs. Your final ROI calculation will
take both costs and benefits into account.
c. Only include benefits that you can quantify. Define the
impact as precisely as you can. You may mention additional
intangible benefits, such as improved morale or increased
customer satisfaction, but stakeholders will want to know
the financial impact.

Highlight the benefits of the project.


Note which parts of the business the project will

affect, and how.
Be clear about where these numbers come
fromdid you get them from colleagues in
Finance, Sales and Marketing, Engineering?
Stakeholders care about the sources for these
assumptions and are more likely to trust your
numbers if the information comes from people
they trust.
Highlight the benefits of the project.
Impact: XYZ Energy Co
a. Explain what might not go as plannedwhether positive
or negative. Most people focus on threats (e.g., What if
the vendor doesnt deliver on time? What if the cost of
raw materials goes through the roof?). But you need to
consider opportunities as well (How can you get a higher
NPV or a faster payback? Can you complete the project
b. Include major risks associated both with doing and with
not doing the project.
c. If youre listing several options, as in this example, make
clear how the risks differ across alternatives.
d. Identify the likelihood of the risks: high, moderate, low.

Highlight the key risks to the project.


e. The primary risks youll want to consider are to costs and

schedule. But you may also want to think about the following:
Personnel: What if the person running this project leaves the
company? What if you dont get all the team members you
Technology: What if you encounter bugs when testing? What if
employees struggle to adapt to the new system?
Scope: What if the project needs to include more (or fewer)
geographic regions, employees, or customers? What if the
stakeholders change requirements?
Quality/performance: What if the product doesnt perform as you
expect it tofor better or worse? What if quality suffers because of a
tight schedule?
Risks: XYZ Energy Co
Include the total cost of your project. Its not
necessary to go into detail on specific costs unless
there are unusual expenses that require
If you are presenting multiple options, as in this
example, explain the cost differences.
If one of the major risks to your project is cost
overrun, you may want to repeat those risks on
this slide.

Summarize the financial costs of the project.

Financial Costs: XYZ Energy Co

a. Show the results of your ROI calculation, using your

companys preferred method.
b. In this example, stakeholders were most concerned with
NPV so it is listed first here, as well as in the executive
summary and closing slides.
c. This slide also includes payback and IRR as additional
information. The more results you provide, the better
your stakeholders will understand the value of your
project relative to others they are considering.
d. If your company doesnt have a preferred ROI type, use
the one most appropriate to your projectbreakeven
analysis, payback period, NPV, or IRR.

Explain the ROI for your project.

a. This is your last word, and what stakeholders
are likely to remember, so include the critical
elements of your presentation.
b. Restate the business need.
c. Identify the pros and cons of your solution or
d. Include your ROI number(s) again.
e. End with your recommendation.
End your presentation with a summary of key
Summary of Options and Recommendations : XYZ
Energy Co

Recommendation : Option 2 gives us the most cost

effective opportunity to minimize customer and revenue
loss and to lower operation and maintenance costs