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The Business Case - The Essential Elements
by Nancy Maluso
Getting approval to implement a reengineering project is often difficult. Especially if your group is competing for funding or if your project is particularly large. Management is more likely to approve your request if you present them with a cohesive justification. A complete business case contains all of the facts that justify the BPR effort.
This article will summarize the critical sections in a business case. Not all projects will require all sections, tailor it to meet the needs of your audience and your project.
Executive Summary
The executive summary provides management with a short (one to three pages) snapshot of your business case. It must be persuasive. The remainder of the business case provides the detail and analysis to support the statements you make in the summary.
For a more effective executive summary, complete all other sections of the business case first. Then pretend you are in an elevator and someone asks you to summarize the results of the reengineering project. The executive summary is this two minute drill.
The focus of the executive summary should be on the bottom line financial benefits to the organization. All of the other information in the business case should be summarized as supporting details.
Situational Assessment and Problem Statement
The BPR effort is being undertaken for some reason. Perhaps something is broken, customer satisfaction is low, profits are not what they should be or employees are not performing. Whatever the reason, a strong business case will begin with a thorough understanding of the issues facing the organization and your teams' conclusions about what is wrong, broken or under performing.
A strong situational assessment will assess the historic, current and future issues related to:
Project Description
This section describes the objective of the reengineering effort. Define the processes, systems and organizations included within the scope of the reengineering effort. Summarize the activities performed by the reengineering team. Finally, include an overview of the stakeholders for whom this effort is being undertaken (customers, management, etc.).
Solution Overview
This section defines the desired end-state for the BPR effort. The end-state provides the framework for the solution definition. Things to include are vision statements or goals. In addition, the solution overview should provide a high level description of the solution -- it should paint a picture for the reader of what the end state will look like.
Solution Detail
This section should walk the reader through all aspects of the solution. This would include:
It is important that the solution be presented from the viewpoint of the organization receiving the benefit of the solution. For example, present the solution through the eyes of the customer if the goal of the BPR effort is to improve customer service. The solution detail should clearly point out how issues presented earlier are being resolved by this solution.
Solution Alternatives
Discuss the alternatives to the solution proposed. This must include a discussion about the implications to the organization if this BPR project does not become implemented (the do-nothing scenario). One alternative should be a subset of the proposed solution. A discussion of previously tried and failed efforts may also be appropriate here if it helps to justify why a BPR effort is required. This would typically be the case if past efforts were Band-Aid or incremental solutions instead of reengineered solutions
Costs
This section should include an estimate for every anticipated cost of the project. This includes costs for the BPR team, development, quality assurance, testing, parallel operations during transition, implementation. It should also include any ongoing maintenance or administrative costs. Calculate the impact upon the operation due to the implementation. This would include productivity losses or the need to hire temporaries to cover for personnel while training.
Benefits
The benefit section should quantify or qualify those benefits that were touched upon in the solution detail. Count benefits for any organization that will reap positive results from the solution. Benefits should be both qualitative and quantitative. Include: cost reductions, revenue increases, improved customer satisfaction, improved employee morale, lower turnover, etc. Activity Based Costing models are useful tools for capturing the benefits associated with a reengineered process (see Article 3 in the business case series).
Categorize benefits into groups for ease in understanding. Some business cases link the benefits directly to the solution elements. However, this is not always possible. Other methods for categorization include:
- organization affected (customers, development, parts, service, etc.)
- type of benefit (cost reduction, increased revenue, etc.)
- timing of benefit (immediate, first year, future, etc.)
Implementation Timeline
Depict each major step in the implementation of the solution on a timeline. Major steps should include: development, testing, training, initial implementation, and rollout. Consider any impacts to the organization from a productivity or operational viewpoint.
Most implementation plans get dictated by the systems development schedule because it is usually the least flexible and has the most dependencies. However, it is important that your team think about each solution element, and define an implementation timeline that will maximize benefits while having the fewest impacts on the organization. The implementation focus will enable you to prioritize the steps in the implementation.
For example, if the focus is to streamline the operation, then the priority would be to implement the automated functions quickly. In order to help you to focus your implementation, link your costs and benefits to the timeline.
Critical Assumptions and Risk Assessment
List all assumptions made by your reengineering team. Include assumptions about: the current state of the business, the status quo of organizations, processes and systems that are outside the scope of the project, constants used in cost/benefit analysis, the approval of the business case, etc. Your description should indicate the impact to the solution if the assumptions did not hold true.
Discuss the risks of the implementation. Discuss what will happen to the organization if the benefits from the reengineering effort do not come to fruition. Include an assessment of the risks caused by implementation on the ongoing operation of the business. Discuss the steps that will be taken to minimize or mitigate each risk.
SWOT Analysis
This analysis looks at the Strengths, Weaknesses, Opportunities and Threats (SWOT) of the solution being proposed. Demonstrate how the organization will maximize strengths and minimize weaknesses of the solution. Include a discussion of the opportunities now possible because of the solution. Include a means to minimize and prevent threats to the organization caused by the solution.
Conclusions and Recommendations
This should summarize the issues, costs and benefits of the solution. Demonstrate that the financial benefits outweigh the costs by including a financial return on investment analysis. Convey a sense of urgency. Re-iterate the goal of the solution.
About the Author - Nancy Maluso is a consultant to businesses and reengineering teams. Her expertise focuses on helping businesses create marketing, operational and business plans. In particular she has assisted many BPR efforts in the development of sound business cases that have enabled her clients to secure the necessary resources for their BPR projects.
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Reengineering Toolkits and Document Templates
Business Process Reengineering Implementation
Change Management Strategies and Action Planning
Process Management and Improvement
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