Fundamentals of Business Case Development

If you uncover an opportunity for an innovative solution that your company doesn’t currently offer, depending on the nature of the solution, you may need to work with your marketing, product management, and financial people to present a business case to get backing to move ahead. The larger, the more unique, and the riskier the sale, the more likely it is that you will need some type of business case.

If you are going to be involved in presenting a business case, it’s important to thoroughly prepare the case. If the sale is a significant one, it will be worth the effort you’ll invest. The more complete and compelling your case, the more likely it is that you will win approval and that you will also get the internal support you’ll need to implement the solution.

The following are key items you’ll want to include in your business case:

• A description of the business problem or opportunity

• An overview and details of the proposed solution(s), including

  • whether the solution is an extension of an existing product or service (less costly)

  • whether the solution will have application to other customers (less costly)

  • the unique customer benefits of the proposed solution (and proposed pricing) and customer perceived value

  • the strategic fit with current and future business plans and alternatives considered

  • a financial analysis for the proposed solution(s)

• A competitive assessment (Are competitive options available?)

• Assumptions and issues (What scenarios have been considered?)

• Key success factors, such as risks of going ahead versus not going ahead, contrary views

According to Steve Celic, a product manager with experience at several large companies, “You have to have solid numbers, both quantitatively and qualitatively, to get buyoff from management, and your assumptions need to be well supported. It used to be that if the numbers weren’t strong, you could still make your case strategically, but that’s no longer true.” He stresses that “upper-level managers are now ‘all from Missouri’ when it comes to financial expectations in business cases, and increasingly, CFOs track results because experience has shown that these projections tend to be optimistic. Given past results, approvals aren’t easy to get. Companies want immediate cash flow and would rather invest in several bigger programs than a lot of smaller ones. Typically, companies like to get their money back in the first year, and few will look out more than three.”

Product managers are typically going to view this in a similar way. With limited resources, they will want a solution that’s right not just for the customer, but also for the company. If it’s not right for the company, why do it?

While you may have a high hurdle to clear in presenting a convincing business case, once you do the momentum will be on your side.

In developing your proposal, build relationships with the right people in the customer’s organization, the community of key decision makers and decision influencers who make the buying decision, define requirements, or control budgets. They may be in a number of different organizations, including operations, marketing, or even supply chain organizations.

If what you’re seeking is going to have wider application with other customers, it may be possible to make it a standard part of your product offering. That will help lower costs and make it more attractive financially.

Celic also cautions salespeople to be careful about establishing understandings to provide something other than what’s formally been agreed to. He noted that in trying to get the sale or accommodate the customer, salespeople might undermine their company’s ability to meet the customer’s expectations, or do it profitably. As a salesperson, you are representing your company and need to negotiate for your company’s interests.