SlideShare a Scribd company logo
1 of 20
Business Case - Formulation  Why, when, what, who, how -  would you need a business case? Anand Subramaniam
[object Object],[object Object]
Why a business case ? Why.. Projects receiving more scrutiny Satisfy governance & compliance need Requirement for explicit and consistent expectations Manage stakeholders expectations Financial measures (ROI, Payback, NPV, DCF, IRR etc) Focus on financial, operational and / or hybrid Need for quantitative & qualitative facts Increased emphasis on metrics and soft benefits Identify / document  benefits of intangible assets (brand image, market share etc) Ensure revenue / cost benefits are not  over (under) stated
What is a business case? Strategic New capabilities and improved competitive position Return on Investment Overall business benefits that justify the initial and on-going commitment of time, resources, and funding Financial Costs, benefits and impact on business performance measures Operations Process improvements (Tangible and Intangible) Innovation Benefits of R&D  for new product development / innovation
When to create a business case? Initiate / Define Evaluate Implement Improve Conti-nously ,[object Object],[object Object],[object Object],[object Object]
Business Case - Measures Net Present Value (NPV) The value today of a series of cash flows received in the future based on a given interest rate (e.g., 5%). Payback  The time period needed before net savings equal initial and ongoing costs (breakeven). Savings Costs Payback Period Time Internal Rate of Return (IRR)  The interest (discount) rate that causes the net present  value of a project to just equal zero (0).  If the project’s IRR is greater than the cost of capital, the project is acceptable; otherwise, it should be rejected.  The calculation of IRR assumes that the cash inflows will be reinvested at the same rate as the internal rate of return. $100 Year 3 $152.09 @ 5% Interest Rate
Business Case Framework (How) Drivers Impact Methods Risks Executive Summary Recommendations Define Evaluate
Executive Summary ,[object Object],[object Object],[object Object],[object Object],[object Object]
Drivers ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Methods ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Methods (Contd) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Methods (Contd) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Impact ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Risks & Contingencies ,[object Object],[object Object],[object Object],[object Object],[object Object]
Recommendation ,[object Object],[object Object]
Post Implementation Review Drivers Impact Methods Risks Executive Summary Recommendations
Lesson Learned … Know your audience,  hide the technical details and develop a compelling story to sell your message Identify additional infrastructure costs for lifecycle/steady state Connect benefits to time horizon Identify cost  reduction or revenue / profit Improvements Document specific mgt. decisions that are requested, not just project approvals Relate project with business strategy Assess soft benefits as valid results Compile samples of business cases that were approved and rejected Executive ownership and review Exit Strategy if project is not returning the desired benefits
Sample – TCO & Business Case
[object Object],[object Object]
[object Object],[object Object]

More Related Content

What's hot

Journey to Maturity Building a PMO
Journey to Maturity Building a PMOJourney to Maturity Building a PMO
Journey to Maturity Building a PMOJames Brown
 
The need for Business design to underpin strategic and operational agility
The need for Business design to underpin strategic and operational agility The need for Business design to underpin strategic and operational agility
The need for Business design to underpin strategic and operational agility Craig Martin
 
Operational Excellence Models, Strategies, Principles & Tools
Operational Excellence Models, Strategies, Principles & ToolsOperational Excellence Models, Strategies, Principles & Tools
Operational Excellence Models, Strategies, Principles & ToolsAurelien Domont, MBA
 
Target Operating Model Strategy Management Governance Organization Leadership...
Target Operating Model Strategy Management Governance Organization Leadership...Target Operating Model Strategy Management Governance Organization Leadership...
Target Operating Model Strategy Management Governance Organization Leadership...SlideTeam
 
PMBOK_5th_Project Management Framework
PMBOK_5th_Project Management FrameworkPMBOK_5th_Project Management Framework
PMBOK_5th_Project Management FrameworkHossam Maghrabi
 
Introduction to Enterprise architecture and the steps to perform an Enterpris...
Introduction to Enterprise architecture and the steps to perform an Enterpris...Introduction to Enterprise architecture and the steps to perform an Enterpris...
Introduction to Enterprise architecture and the steps to perform an Enterpris...Prashanth Panduranga
 
Gartner's IT Score Wallchart
Gartner's IT Score WallchartGartner's IT Score Wallchart
Gartner's IT Score WallchartPaul Sullivan
 
Lean Business Architecture
Lean Business ArchitectureLean Business Architecture
Lean Business ArchitectureAndrew Blain
 
P3O - The Value Adding PMO - from Strategy to Projects
P3O - The Value Adding PMO - from Strategy to ProjectsP3O - The Value Adding PMO - from Strategy to Projects
P3O - The Value Adding PMO - from Strategy to ProjectsTony Vynckier
 
BUSINESS ARCHITECTURE OVERVIEW
BUSINESS ARCHITECTURE OVERVIEWBUSINESS ARCHITECTURE OVERVIEW
BUSINESS ARCHITECTURE OVERVIEWKenMartin18
 
Business Architecture Explained
Business Architecture ExplainedBusiness Architecture Explained
Business Architecture Explainedaaronwilliamson
 
Enterprise Architecture, Project Management & Digital Transformation
Enterprise Architecture, Project Management & Digital TransformationEnterprise Architecture, Project Management & Digital Transformation
Enterprise Architecture, Project Management & Digital TransformationRiaz A. Khan, OpenCA, TOGAF
 
Enterprise Architecture Implementation And The Open Group Architecture Framew...
Enterprise Architecture Implementation And The Open Group Architecture Framew...Enterprise Architecture Implementation And The Open Group Architecture Framew...
Enterprise Architecture Implementation And The Open Group Architecture Framew...Alan McSweeney
 
Project portfolio management - webinar
Project portfolio management - webinarProject portfolio management - webinar
Project portfolio management - webinarAli Zeeshan
 
Best Practices for a CoE
Best Practices for a CoEBest Practices for a CoE
Best Practices for a CoESplunk
 
Business Framework Value Proposition PowerPoint Presentation Slides
Business Framework Value Proposition PowerPoint Presentation SlidesBusiness Framework Value Proposition PowerPoint Presentation Slides
Business Framework Value Proposition PowerPoint Presentation SlidesSlideTeam
 

What's hot (20)

Journey to Maturity Building a PMO
Journey to Maturity Building a PMOJourney to Maturity Building a PMO
Journey to Maturity Building a PMO
 
The need for Business design to underpin strategic and operational agility
The need for Business design to underpin strategic and operational agility The need for Business design to underpin strategic and operational agility
The need for Business design to underpin strategic and operational agility
 
Operational Excellence Models, Strategies, Principles & Tools
Operational Excellence Models, Strategies, Principles & ToolsOperational Excellence Models, Strategies, Principles & Tools
Operational Excellence Models, Strategies, Principles & Tools
 
Target Operating Model Strategy Management Governance Organization Leadership...
Target Operating Model Strategy Management Governance Organization Leadership...Target Operating Model Strategy Management Governance Organization Leadership...
Target Operating Model Strategy Management Governance Organization Leadership...
 
PMBOK_5th_Project Management Framework
PMBOK_5th_Project Management FrameworkPMBOK_5th_Project Management Framework
PMBOK_5th_Project Management Framework
 
Portfolio management
Portfolio managementPortfolio management
Portfolio management
 
Introduction to Enterprise architecture and the steps to perform an Enterpris...
Introduction to Enterprise architecture and the steps to perform an Enterpris...Introduction to Enterprise architecture and the steps to perform an Enterpris...
Introduction to Enterprise architecture and the steps to perform an Enterpris...
 
Gartner's IT Score Wallchart
Gartner's IT Score WallchartGartner's IT Score Wallchart
Gartner's IT Score Wallchart
 
Lean Business Architecture
Lean Business ArchitectureLean Business Architecture
Lean Business Architecture
 
P3O - The Value Adding PMO - from Strategy to Projects
P3O - The Value Adding PMO - from Strategy to ProjectsP3O - The Value Adding PMO - from Strategy to Projects
P3O - The Value Adding PMO - from Strategy to Projects
 
BUSINESS ARCHITECTURE OVERVIEW
BUSINESS ARCHITECTURE OVERVIEWBUSINESS ARCHITECTURE OVERVIEW
BUSINESS ARCHITECTURE OVERVIEW
 
Business Architecture Explained
Business Architecture ExplainedBusiness Architecture Explained
Business Architecture Explained
 
The Modern PMO
The Modern PMOThe Modern PMO
The Modern PMO
 
Enterprise Architecture, Project Management & Digital Transformation
Enterprise Architecture, Project Management & Digital TransformationEnterprise Architecture, Project Management & Digital Transformation
Enterprise Architecture, Project Management & Digital Transformation
 
Enterprise Architecture Implementation And The Open Group Architecture Framew...
Enterprise Architecture Implementation And The Open Group Architecture Framew...Enterprise Architecture Implementation And The Open Group Architecture Framew...
Enterprise Architecture Implementation And The Open Group Architecture Framew...
 
Project portfolio management - webinar
Project portfolio management - webinarProject portfolio management - webinar
Project portfolio management - webinar
 
Business Case Development Framework
Business Case Development FrameworkBusiness Case Development Framework
Business Case Development Framework
 
Best Practices for a CoE
Best Practices for a CoEBest Practices for a CoE
Best Practices for a CoE
 
Business Framework Value Proposition PowerPoint Presentation Slides
Business Framework Value Proposition PowerPoint Presentation SlidesBusiness Framework Value Proposition PowerPoint Presentation Slides
Business Framework Value Proposition PowerPoint Presentation Slides
 
PMBOK 7th Edition What is Changing?
PMBOK 7th Edition What is Changing?PMBOK 7th Edition What is Changing?
PMBOK 7th Edition What is Changing?
 

Viewers also liked

Viewers also liked (20)

Change Management Checklist
Change Management ChecklistChange Management Checklist
Change Management Checklist
 
LSS Idea Generation to Project Execution
LSS Idea Generation to Project ExecutionLSS Idea Generation to Project Execution
LSS Idea Generation to Project Execution
 
Cause & Effect
Cause & EffectCause & Effect
Cause & Effect
 
FMEA Analysis Cycle
FMEA Analysis CycleFMEA Analysis Cycle
FMEA Analysis Cycle
 
Project Execution & Control Checklist
Project Execution & Control ChecklistProject Execution & Control Checklist
Project Execution & Control Checklist
 
Stakeholder Relationship Management Audit
Stakeholder Relationship Management AuditStakeholder Relationship Management Audit
Stakeholder Relationship Management Audit
 
Design For Six Sigma
Design For Six SigmaDesign For Six Sigma
Design For Six Sigma
 
Link (Non)Financial To Supply Chain Performance Metrics
Link (Non)Financial To Supply Chain Performance MetricsLink (Non)Financial To Supply Chain Performance Metrics
Link (Non)Financial To Supply Chain Performance Metrics
 
Gemba kaizen
Gemba kaizenGemba kaizen
Gemba kaizen
 
Service Delivery & Support
Service Delivery & SupportService Delivery & Support
Service Delivery & Support
 
Optimise & Integrate WCM & SCM
Optimise & Integrate   WCM & SCMOptimise & Integrate   WCM & SCM
Optimise & Integrate WCM & SCM
 
Project Closure Report
Project Closure ReportProject Closure Report
Project Closure Report
 
Bottom Line Improvement
Bottom Line ImprovementBottom Line Improvement
Bottom Line Improvement
 
Innovation
InnovationInnovation
Innovation
 
Content Management System
Content Management SystemContent Management System
Content Management System
 
Enterprise Content Management (ECM) System
Enterprise Content Management (ECM) SystemEnterprise Content Management (ECM) System
Enterprise Content Management (ECM) System
 
Lean Transformation ~ A Journey
Lean Transformation ~ A JourneyLean Transformation ~ A Journey
Lean Transformation ~ A Journey
 
Lesson Learned Report
Lesson Learned ReportLesson Learned Report
Lesson Learned Report
 
Benchmarking
BenchmarkingBenchmarking
Benchmarking
 
Customer Service Strategy & Customer Experience
Customer Service Strategy & Customer ExperienceCustomer Service Strategy & Customer Experience
Customer Service Strategy & Customer Experience
 

Similar to Business Case ~ Formulation

Value Based Selling™ business model - Intro
Value Based Selling™  business model - IntroValue Based Selling™  business model - Intro
Value Based Selling™ business model - IntroShimon Abouzaglo
 
Portfolio Mgt Presentation
Portfolio Mgt PresentationPortfolio Mgt Presentation
Portfolio Mgt PresentationCarolyn Reid
 
"Writing a persuasive business case" by Vimal
"Writing a persuasive business case" by Vimal"Writing a persuasive business case" by Vimal
"Writing a persuasive business case" by VimalVimal Mohan
 
Business Cases And Benefits Management
Business Cases And Benefits ManagementBusiness Cases And Benefits Management
Business Cases And Benefits ManagementAlan McSweeney
 
Implementing Balance Scorecard
Implementing Balance ScorecardImplementing Balance Scorecard
Implementing Balance ScorecardAnand Subramaniam
 
Introduction to strategic management
Introduction to strategic managementIntroduction to strategic management
Introduction to strategic managementDr Bryan Mills
 
Overview of Key Performance Indicators
Overview of Key Performance IndicatorsOverview of Key Performance Indicators
Overview of Key Performance IndicatorsMicheal Axelsen
 
Book Gis ROI Presentation
Book   Gis ROI PresentationBook   Gis ROI Presentation
Book Gis ROI Presentationrosssmith5
 
Evaluating Human Capital: Harnessing Efficiency and Productivity
Evaluating Human Capital: Harnessing Efficiency and ProductivityEvaluating Human Capital: Harnessing Efficiency and Productivity
Evaluating Human Capital: Harnessing Efficiency and ProductivityNational HRD Network
 
Scaling Your Capture and Proposal Management Processes to Fit Your Company
Scaling Your Capture and Proposal Management Processes to Fit Your CompanyScaling Your Capture and Proposal Management Processes to Fit Your Company
Scaling Your Capture and Proposal Management Processes to Fit Your CompanyLohfeld Consulting Group
 
CPA Week 2015 Commercial Acumen Presentation - Kym Williams, BRS
CPA Week 2015 Commercial Acumen Presentation - Kym Williams, BRSCPA Week 2015 Commercial Acumen Presentation - Kym Williams, BRS
CPA Week 2015 Commercial Acumen Presentation - Kym Williams, BRSSarah Edson
 
Business Case Development Toolkit (with Excel model)
Business Case Development Toolkit (with Excel model)Business Case Development Toolkit (with Excel model)
Business Case Development Toolkit (with Excel model)David Tracy
 
The Business Case for CRM
The Business Case for CRMThe Business Case for CRM
The Business Case for CRMThom. Poole
 
Balanced Scorecard (part 1) by Shantonu Dasmahapatra
Balanced Scorecard (part 1) by Shantonu DasmahapatraBalanced Scorecard (part 1) by Shantonu Dasmahapatra
Balanced Scorecard (part 1) by Shantonu DasmahapatraNational HRD Network
 
Steve Calder: Business Benefits of GIS: An ROI Approach
Steve Calder: Business Benefits of GIS: An ROI ApproachSteve Calder: Business Benefits of GIS: An ROI Approach
Steve Calder: Business Benefits of GIS: An ROI ApproachAGI Geocommunity
 
Sap Approach
Sap ApproachSap Approach
Sap ApproachJacques
 
Business case development workshop october 2019
Business case development workshop   october 2019Business case development workshop   october 2019
Business case development workshop october 2019Ben Carroll
 

Similar to Business Case ~ Formulation (20)

Value Based Selling™ business model - Intro
Value Based Selling™  business model - IntroValue Based Selling™  business model - Intro
Value Based Selling™ business model - Intro
 
Portfolio Mgt Presentation
Portfolio Mgt PresentationPortfolio Mgt Presentation
Portfolio Mgt Presentation
 
"Writing a persuasive business case" by Vimal
"Writing a persuasive business case" by Vimal"Writing a persuasive business case" by Vimal
"Writing a persuasive business case" by Vimal
 
Business Cases And Benefits Management
Business Cases And Benefits ManagementBusiness Cases And Benefits Management
Business Cases And Benefits Management
 
The Business Of Safety
The Business Of SafetyThe Business Of Safety
The Business Of Safety
 
Implementing Balance Scorecard
Implementing Balance ScorecardImplementing Balance Scorecard
Implementing Balance Scorecard
 
Introduction to strategic management
Introduction to strategic managementIntroduction to strategic management
Introduction to strategic management
 
3a 7 End Result Audit
3a   7   End Result Audit3a   7   End Result Audit
3a 7 End Result Audit
 
Overview of Key Performance Indicators
Overview of Key Performance IndicatorsOverview of Key Performance Indicators
Overview of Key Performance Indicators
 
Book Gis ROI Presentation
Book   Gis ROI PresentationBook   Gis ROI Presentation
Book Gis ROI Presentation
 
Evaluating Human Capital: Harnessing Efficiency and Productivity
Evaluating Human Capital: Harnessing Efficiency and ProductivityEvaluating Human Capital: Harnessing Efficiency and Productivity
Evaluating Human Capital: Harnessing Efficiency and Productivity
 
Scaling Your Capture and Proposal Management Processes to Fit Your Company
Scaling Your Capture and Proposal Management Processes to Fit Your CompanyScaling Your Capture and Proposal Management Processes to Fit Your Company
Scaling Your Capture and Proposal Management Processes to Fit Your Company
 
CPA Week 2015 Commercial Acumen Presentation - Kym Williams, BRS
CPA Week 2015 Commercial Acumen Presentation - Kym Williams, BRSCPA Week 2015 Commercial Acumen Presentation - Kym Williams, BRS
CPA Week 2015 Commercial Acumen Presentation - Kym Williams, BRS
 
Business Case Development Toolkit (with Excel model)
Business Case Development Toolkit (with Excel model)Business Case Development Toolkit (with Excel model)
Business Case Development Toolkit (with Excel model)
 
The Business Case for CRM
The Business Case for CRMThe Business Case for CRM
The Business Case for CRM
 
Balanced Scorecard (part 1) by Shantonu Dasmahapatra
Balanced Scorecard (part 1) by Shantonu DasmahapatraBalanced Scorecard (part 1) by Shantonu Dasmahapatra
Balanced Scorecard (part 1) by Shantonu Dasmahapatra
 
Steve Calder: Business Benefits of GIS: An ROI Approach
Steve Calder: Business Benefits of GIS: An ROI ApproachSteve Calder: Business Benefits of GIS: An ROI Approach
Steve Calder: Business Benefits of GIS: An ROI Approach
 
Sap Approach
Sap ApproachSap Approach
Sap Approach
 
Metrics Mapping
Metrics MappingMetrics Mapping
Metrics Mapping
 
Business case development workshop october 2019
Business case development workshop   october 2019Business case development workshop   october 2019
Business case development workshop october 2019
 

More from Anand Subramaniam (20)

Lean transformation
Lean transformationLean transformation
Lean transformation
 
Lean principles
Lean principlesLean principles
Lean principles
 
Lean thinking
Lean thinkingLean thinking
Lean thinking
 
Anand dossier 2
Anand dossier 2Anand dossier 2
Anand dossier 2
 
Anand short dossier
Anand short dossierAnand short dossier
Anand short dossier
 
Set up reduction
Set up reductionSet up reduction
Set up reduction
 
Waste Walk ~ Audit
Waste Walk ~ AuditWaste Walk ~ Audit
Waste Walk ~ Audit
 
Muda in service industries
Muda in service industriesMuda in service industries
Muda in service industries
 
Defects Vs. Errors
Defects Vs. ErrorsDefects Vs. Errors
Defects Vs. Errors
 
3 MU
3 MU3 MU
3 MU
 
Ninbennoaru Jidoka
Ninbennoaru JidokaNinbennoaru Jidoka
Ninbennoaru Jidoka
 
LSS - 5 Year Strategy
LSS -  5 Year StrategyLSS -  5 Year Strategy
LSS - 5 Year Strategy
 
Lean Six Sigma Projects & Strategy Linkage
Lean Six Sigma Projects & Strategy LinkageLean Six Sigma Projects & Strategy Linkage
Lean Six Sigma Projects & Strategy Linkage
 
CMMI & Six Sigma Integration
CMMI & Six Sigma IntegrationCMMI & Six Sigma Integration
CMMI & Six Sigma Integration
 
CMMI Capability Maturity Model Integration
CMMI   Capability Maturity Model Integration CMMI   Capability Maturity Model Integration
CMMI Capability Maturity Model Integration
 
8 D – Problem Solving Process
8 D – Problem Solving Process8 D – Problem Solving Process
8 D – Problem Solving Process
 
Total Productive Maintenance
Total Productive MaintenanceTotal Productive Maintenance
Total Productive Maintenance
 
TPM Implementation Strategy
TPM Implementation StrategyTPM Implementation Strategy
TPM Implementation Strategy
 
Overall Equipment Effectiveness
Overall Equipment EffectivenessOverall Equipment Effectiveness
Overall Equipment Effectiveness
 
Autonomous Maintenance
Autonomous MaintenanceAutonomous Maintenance
Autonomous Maintenance
 

Business Case ~ Formulation

  • 1. Business Case - Formulation Why, when, what, who, how - would you need a business case? Anand Subramaniam
  • 2.
  • 3. Why a business case ? Why.. Projects receiving more scrutiny Satisfy governance & compliance need Requirement for explicit and consistent expectations Manage stakeholders expectations Financial measures (ROI, Payback, NPV, DCF, IRR etc) Focus on financial, operational and / or hybrid Need for quantitative & qualitative facts Increased emphasis on metrics and soft benefits Identify / document benefits of intangible assets (brand image, market share etc) Ensure revenue / cost benefits are not over (under) stated
  • 4. What is a business case? Strategic New capabilities and improved competitive position Return on Investment Overall business benefits that justify the initial and on-going commitment of time, resources, and funding Financial Costs, benefits and impact on business performance measures Operations Process improvements (Tangible and Intangible) Innovation Benefits of R&D for new product development / innovation
  • 5.
  • 6. Business Case - Measures Net Present Value (NPV) The value today of a series of cash flows received in the future based on a given interest rate (e.g., 5%). Payback The time period needed before net savings equal initial and ongoing costs (breakeven). Savings Costs Payback Period Time Internal Rate of Return (IRR) The interest (discount) rate that causes the net present value of a project to just equal zero (0). If the project’s IRR is greater than the cost of capital, the project is acceptable; otherwise, it should be rejected. The calculation of IRR assumes that the cash inflows will be reinvested at the same rate as the internal rate of return. $100 Year 3 $152.09 @ 5% Interest Rate
  • 7. Business Case Framework (How) Drivers Impact Methods Risks Executive Summary Recommendations Define Evaluate
  • 8.
  • 9.
  • 10.
  • 11.
  • 12.
  • 13.
  • 14.
  • 15.
  • 16. Post Implementation Review Drivers Impact Methods Risks Executive Summary Recommendations
  • 17. Lesson Learned … Know your audience, hide the technical details and develop a compelling story to sell your message Identify additional infrastructure costs for lifecycle/steady state Connect benefits to time horizon Identify cost reduction or revenue / profit Improvements Document specific mgt. decisions that are requested, not just project approvals Relate project with business strategy Assess soft benefits as valid results Compile samples of business cases that were approved and rejected Executive ownership and review Exit Strategy if project is not returning the desired benefits
  • 18. Sample – TCO & Business Case
  • 19.
  • 20.