When you are preparing a business case, you must include the information that is relevant to, and will influence, the decision makers.
INFLUENCING THE DECISION MAKERS
hen you are preparing a business case, you must include the information that is relevant to, and will influence, the decision makers.
Different decision makers have different expectations from business proposals.
Company executives want to know how a new product or service fits into their industry - whether it is related to the industry or opens up another direction. These concepts are known as
Vertical integration occurs when a company expands into a related business. An example would be a coffee company that wholesales coffee to retail outlets, and then decides to open its own retail outlets.
Horizontal integration occurs when a company seeks to sell different types of a single product to different markets. An example of horizontal integration is a clothing company that runs different retail outlets for both "luxury" and "price-conscious" clothing markets.
Company owners and executives need to know whether the cost of developing a new product will be offset by the eventual profits.
They must commit to the new product to the extent that they will approve the costs.
Corporate directors and stockholders must commit to new product development. They will have some of the same questions as owners and other company executives, such as
- How will the company stock be affected?
- What will be the cost?
- How will the cost affect stock dividends?
Marketing and development personnel can provide information for your business case, and can facilitate its approval through their commitment to the idea.
Marketing personnel can help you determine whether a market exists for the product or service, and whether the market is ready for it. They can also provide information on promotion and pricing.
Research and development staff can help to develop and modify the product prototype, help establish costs, identify possible production problems, and show commitment to the new product idea.
Some companies, depending on their size and financial situation, need to secure outside investment to support new product development.
If this is true of your company, you may need to present your business case to bankers and other financial resource managers, such as venture capitalists.
These outside groups must commit to your new product or service idea. The business case helps them to determine whether your idea is a high or low risk for a loan.
By considering the needs of these key groups and engaging them in the process, you can prepare an effective business case that helps you to secure the commitment and funding you need for your project.
Ravi is preparing a business case for the establishment of a new e-commerce site. He needs to influence a number of decision makers.
Ravi positions the e-commerce project as horizontally integrated into the existing business. He assures the CEO that, although the initial cost of the project is high, this will be offset by significantly increased sales revenue within a year.
Company marketing director
Ravi focuses on the cost of the e-commerce project, and states that the increased sales and raised profile resulting from the new ordering service will have a positive effect on the share price.
Marketing and development managers
Ravi focuses on the ripeness of the market for the new ordering service, and is able to confirm that the production resources for the project exist or can be made available.
By focusing on the key decision makers and their concerns, Ravi was successful in communicating how his project could benefit their particular areas of interest.
Alan works for an IT company, and he needs to persuade several decision makers in the company to approve his proposal for a new corporate intranet.
Alan does not convince the CEO because he gives no indication of how the corporate intranet will be integrated into the business, or how much it will cost.
Alan makes no connection between the implementation of a corporate intranet and the overall profitability or share price of the company.
Marketing and development team managers
Alan fails to give any information on the marketing potential for the corporate intranet project, or whether the necessary development resources are available.
Because Alan did not use his business case to address the specific concerns of the decision makers, he failed to convince the decision makers that his project was worth implementing.
Decision makers are the people who will decide whether your project is approved. Identifying the decision makers, defining their interest in your case, and finding answers to the kinds of questions they may ask will help you to prepare and present a strong business case.
Different decision makers, such as company executives, stockholders, managers, and outside finance groups, have different expectations from business proposals.
In addition to the decision makers, many other individuals or groups will need to refer to your business case, for various reasons, throughout the project life cycle.
I have been teaching and training agents, team leaders, supervisors, managers and admins of call centers and other businesses in BPO related fields. This series, comes as a result of that experience. I have more than 4,000 modules that I plan on sharing here. This is # 007-11