Gallo Amy - HBR Guide to Building Your Business Case

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Raymond Sheen

with Amy Gallo

HARVARD BUSINESS REVIEW PRESS

Boston, Massachusetts

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Library of Congress Cataloging-in-Publication Data

Sheen, Raymond.

HBR guide to building your business case / Raymond Sheen with Amy Gallo.

pages cm. (Hbr guide)

ISBN 978-1-63369-002-8 (paperback)

1. Business planning. 2. Strategic planning. 3. New business enterprisesPlanning. I. Gallo, Amy. II. Title.

HD30.28.S428 2015

658.4'012dc23

2015002965

Youve got a great idea that will increase revenue or productivitybut how do you get approval to make it happen? By building a business case that clearly shows its value.

Maybe you struggle to win support for your projects because youre not sure what kind of data your stakeholders will trust, or naysayers tend to shoot down your ideas at the last minute. Perhaps youre intimidated by analysis and number crunching, so you just take a stab at estimating costs and benefits, with little confidence in your accuracy.

To get any idea off the ground in your company, youll have to make a strong case for it. This guide gives you the tools to do that.

Youll get better at:

• Spelling out the business need for your idea
• Aligning your case with strategic goals
• Building the right team to shape and test your idea
• Calculating the return on investment
• Analyzing risks and opportunities
• Gaining support from colleagues
• Presenting your case to stakeholders
• Securing the resources your project needs

Success is enabling a wise decision.

Youre telling a story about how to meet a business need.

Seek counsel from those who know what will fly.

Who really has the authority to give your project the green light?

Find out what your stakeholders care about.

What pain are you trying to alleviate? What opportunity are you pursuing?

You need multiple perspectives to find the right solution.

The tough part is ruling out options.

Pave the way for realistic estimates.

Peg them to categories in your companys P&L.

Spreadsheets make it fairly painless.

Weigh the what ifs.

Summarize your story and support it with data.

Drum up support before decision time.

Use this brief checklist to make sure youve covered all the bases.

Appeal directly to decision makers.

Yes is meaningless unless stakeholders commit resources.

Get started, even if it means heading back to the drawing board.

BY CHRIS ANDERSON, TED CURATOR

Whether youre pitching a new project at your company or seeking funds for a start-up, youll need to develop a persuasive business case if you want your idea to go anywhere.

Your primary goal is to help people decide whether to invest resources in your idea. If youre making a case for a project or initiative within an organization, youre not starting in a vacuum. You have insight into your companys strategic priorities, and you probably know the people youre pitching to. But youve still got plenty of work to do. Your audiencethe leaders of your unit or companywill expect you to put yourself in their shoes. (What are their chief concerns? How does your project address them?) Theyll also expect a thoughtful analysis of the financials and the risks. Theyll want to understand what impact your project will have on the P&L so they can intelligently weigh the costs and benefits.

How does that differ from pitching a start-up? As an entrepreneur, youre selling potential partners and funders on you as well as on your idea. Though thats an important distinctionit affects what youre trying to achieve and what youll emphasize in your presentationyoull take the same general approach you would inside an organization. In both situations, you must identify a clear business need, get to know your stakeholders, and tell them a compelling story about how to profitably meet that need.

Thats what youll learn to do in this guide. Well focus on building internal business cases because thats the challenge most managers facebut the principles and tools will benefit entrepreneurs, too.

Internal business cases can serve many purposes, but here are three common reasons for developing one:

1. You want to create a new product or service. Here, your goal is to demonstrate the profits your offering would add to the bottom line. Youll help decision makers weigh sales estimates against the costs of development, manufacturing, and delivery.
2. You want to invest in a large IT system. When youre making a case for a new enterprise resource planning (ERP) system or a customer relationship management (CRM) database, for instance, youll take into account the impact on the entire businesswhich departments will benefit and which will incur the costs.
3. You want to improve your companys facilities. This type of business case is becoming more common as organizations try to save money through energy efficiency. You may propose buying a new building, for example, or remodeling an existing one.

You might also create a business case to prioritize projects and propose cutting a few; obtain additional resources for an ongoing initiative; invest in building a new capability; or decide whether to outsource a function.