Saturday, May 30, 2020

Business Case Development

Improvement projects of all kinds face the challenge of justifying themselves. There are three ways to make a business case:

  1. Removing the pain (or risk) - when doing nothing is not an option, or is more costly and painful than spending money to fix something, e.g. Y2K remediation, Sarbanes-Oxley compliance, etc.

  2. Improving efficiency (a.k.a. "taking out cost") - initiatives that promise to pay for themselves by lowering operating costs. Key questions are:

    • What is the payback period on the required investment?
    • Where and how will the savings occur, versus where the money will be spent for the improvement initiative?
    • How can the organization be sure that benefits are being realized?
  3. Headcount reductions and outsourcing initiatives are examples of this type of business case.

  1. Seizing an opportunity - typically these initiatives are focused on increasing the revenue flowing into an organization, rather than on removing costs. Most so-called "strategic" initiatives fall into this category, as do product or company acquisitions, new product or service launches, etc.

The Sophic Group excels at analyzing improvement initiatives and helping customers develop quantified business cases showing the full value of improvement projects and initiatives.

Additionally, The Sophic Group can design and implement benefits tracking systems that monitor the key success factors and document the realization (or non-realization) of the benefits sought by the initiatives.

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