So, You Want to Prepare a Business Case For Your Idea?
"Without a business case, an opportunity is merely an idea"
Business cases provide a comprehensive, quantified support rationale for new initiatives. Unfortunately, most R&D personnel aren't familiar with the business case nor know how to prepare one, as these are traditionally constructed by business people. So, for those new to the concept, what is a business case?
Put simply, it's the stuff you'd want to know and consider before making any kind of important decision, business or otherwise. It states the problem/need, the proposed solution/opportunity, its benefits and costs, and the consequences of failing to pursue it.
While not familiar to all R&D managers, a business case should not be a totally foreign concept, either. Capital appropriation requests are a form of business case, and many R&D personnel are familiar with these. There isn't a single "best" way to develop a business case, and each company has its own format preferences. A business case needs to present sufficient information to enable its intended audience to judge its merits and to decide whether or not they support its conclusions. It can then be discussed alongside other alternatives being considered.
The following are common components of a business case:
- Problem Statement
- Value Proposition
- Benefits of Adopting
- Costs of Adopting
- Opportunity Costs/Consequences of Not Adopting
- Alternatives Considered
- Impact on Other Functions
- Other Parties Consulted (and their inputs)
- Actions Required and Implications (including time, resources)
In order for a business case to be effective at persuasively framing a new opportunity, it must be viewed as credible by its audience. For R&D, this usually means Marketing. It's only going to be as good as the assumptions and inputs that drive the numbers in it. This requires that other key stakeholders be consulted and their inputs incorporated into the business case.
In coming weeks, we'll discuss each of the elements in a business case, including the use of the Product Canvas (pioneered by Shardul Mehta) as a convenient, visually descriptive communication vehicle.
BFS Innovations can help prepare your business cases. Contact me today to discuss your challenge.