By writing a business case to poll your executive team. The business case can be used to pitch an innovation project highlighting the measurable metrics such as revenue growth, volume growth, profit generation, and market share. Business cases are used to capture opportunities and are a necessary tool for strategic opportunity management and of course justifying the expense.
To the organization, the business case presentation outlines the business opportunity in the marketplace whilst identifying the risk and reward in the industry. It can be used to apply various concepts covered in strategic opportunity management taking into consideration all aspects of costs (labor, materials, etc.) and possible sources of revenues and applications for success.
Once a functional team, (e.g. human resources, sales or IT) identifies key digital assets that can be leveraged to significantly improve business processes or example improving customer user experience utilizing a mobile app to increase market growth . A business case can be used in motivating the designing/improving business processes by enhancing the traditional business model to include mobile apps.The business case captures the link between business process, cost of technology and benefit realization whilst ensuring the company’s strategy is consistent with the goals of the functional innovation.
“An organisation’s ability to learn, and translate that learning into action rapidly, is the ultimate competitive advantage” —Jack Welch
So, what are the elements for creating a very good business case for processes aligning IT and business
An Environmental Analysis – Let us begin with an internal environment analysis scanning the organization’s business vision, strategy, objectives, technological architecture and platform. Identify where there is opportunities related to business functions and what the key technologies that can be leveraged as driver for business. Secondly with an external environment analysis, you assess whether can your firm take advantage of a business opportunities in the market and the time frame within it is likely to continue. Check industry standards and regulations.
Business Problem – Describe what the business problem that presents the opportunity to penetrate a market or increase revenue growth by leveraging new technology such as digital technology.
Business Opportunity- Create an application that uses new suite of digital tools such as“internet of things” cloud platform etc. An improvement in sales processes by extending can lead to an increase customer sign on , which is a contributing factor to revenue. In 2013, OgilvyOne Worldwide London launched plane detecting billboards for British airways using digital sensors and real time data.The #LookUp campaign had billboards that reacted to specific BA planes as they flew overhead displaying the plane details destination and up-to-the-minute best price information from BA. Engaging and informing the customer calling them to action to look up.. read the full story at https://www.dandad.org/en/d-ad-ba-magic-of-flying-case-study-insights/
Costs and Funding Options – Costs: The tangible and intangible costs per year to the company upon implementation of the solution must be listed. These may be human resources, equipment capital expenditure, training, marketing costs, operational down-time and short term loss in productivity. The Payback period: The length of time required to recoup funds invested is provided by this calculation – Investment Required divided by Net Cash Inflows. Funding options : You can make use of Internal Rate of Return (IRR). By determining the internal rate of return of an investment that makes the net present value of all net cash flows equal zero. The higher an option’s internal rate of return the more financially desirable it is to undertake. An option with an internal rate of return less than the firm’s cost of capital should be avoided; the IRR is favorably higher than the cost of capital can be investigated further to ascertain the Time to positive cash flow in years.
Risk Summary – Identify and map risk by discussing the kind and class of risk and reward of a concept in the business plan. Any business enterprise that offers a reward will have risk attached to it and to enable investment the risk must be identified. The amount of investment required will carry risk, for example the risk is in the short life-cycles of technology and the changing customer needs. Include a Product Life-cycle business challenges analysis. The risk summary must include the description of the risk, the likelihood it will occur, its impact and finally the mitigating actions.
Your business cases can be creative and innovative elaborating the resources required to design, and build products, to demonstrating business value and how you can monetize that value of the innovation.Development of new strategic scenarios and open the business to new possibilities.
If you want to know more about the Digital Business Strategy (DBS) model and the implementation with business cases. Stay tuned , in the next coming weeks The Institute For Digital Business Strategy will be offering a free e-book entitled “THE DEFINITIVE GUIDE TO A DIGITAL BUSINESS STRATEGY”