Business Case Development
商业案例开发
What would you do? 
你会怎么做？
Sydney Punger heads the training and development group at Satellite Electronics. Satellite's leadership recently decided to change its sales strategy from selling "products" to selling "solutions." To support the new strategy, Sydney's group will need to provide services such as developing and implementing new training for the sales staff. Sydney's boss asks her to prepare a business case to support the hiring of two new employees to help train the staff. Sydney isn't sure this is the best course of action.
Sydney's boss made the common mistake of ignoring a universe of possibilities and thinking about a business case as a means to justify a desired course of action. Instead, Sydney should build a case around how the company can best create and supply new training to the sales staff. By thinking about the opportunity, instead of just one way of
approaching it, Sydney is likely to come up with a better recommendation. As part of the process, Sydney should consider multiple alternatives, including remaining with the status quo. It may turn out that Sydney's company would do better by focusing on eliminating current training projects than trying to expand the staff to take on new ones.
In this topic, you'll learn how to build a business case to explore multiple alternatives before making a recommendation to support a particular option. You'll learn how to define the opportunity, identify and analyze alternatives, and present your final recommendation to
key stakeholders.
How do you decide on the best course of action for your company to take advantage of newopportunities? By building a business case.
Topic Objectives 主题目标
This topic provides a framework for building a business case. You'll learn how to:
• Clearly define the opportunity you'll want to address in your business case
• Identify and analyze a range of alternatives
• Recommend one option and assess its risks
• Create a high-level implementation plan for your proposed alternative
• Communicate your case to key stakeholders
What is a business case? 
什么是商业案例？
Perhaps you've been managing a project and you've concluded that acquiring some new software would help your company cut costs and increase efficiencies. Or perhaps you want to hire several new employees or buy a new piece of equipment for your group.
You've presented your proposal to your boss, and he responded, "You'll need to make the business case for it before we can consider it."
You're happy to oblige—but you're not sure what, precisely, a business case consists of or how to go about creating one. You wonder, "Does he mean a business plan?" But a business case differs in important ways from a business plan. Your first step in building a case for your great idea is to understand the difference.
Business case vs. business plan 
商业案例与商业计划书
A business case answers the question: "What happens if we take this course of action?" For example, if your unit is considering expanding sales to a new market, your boss might ask, "Which of three alternative markets should we invest in to create the most value—and should we even make this investment?"
Managers at all levels create business cases to gain support for all manner of decisions, to initiate action, or to obtain resources for an initiative.
A business plan, on the other hand, describes how an organization or business unit plans to navigate successfully through its own unique competitive environment. Business plans feature long-range projections of revenues, expenses, business strategy, and other information. Typically, managers and executives use business plans to secure financing from investors or to plan
strategy execution.
Key Idea: When to create a business case
关键思想：何时创建业务案例
Key Idea
In many ways, the process of building a business case is similar to solving a problem. For example, suppose you don't have enough staff to accomplish your responsibilities, or you believe that your company's competitors use more efficient processes that allow them to have lower costs than your firm does.
Developing a business case would not only help you identify potential solutions to such problems,it would also help you "sell" your ideas to key decision makers.
A business case is useful when you want to:
• Demonstrate the value a proposed product or service would generate for your organization,
• Prioritize projects within your group and identify which ones to eliminate,
• Demonstrate the value of a product or service to a customer to make a sale,
• Obtain additional resources for a new project, initiative, or organization,
• Modify an existing offering,
• Invest in a new capability, such as a software program or training,
• Or decide whether to outsource a particular function.
Do you need to demonstrate a product's value? Do you have projects to prioritize or need new resources? If so, it's time to build a business case.
The complexity of a business case
商业案例的复杂性
It's not the plan that is important, it's the planning.
–Dr. Graeme Edwards
As you might imagine, building a business case for a relatively simple decision—such as whether to buy a new copier for your department and, if so, which one to select—is a pretty straightforward process. But when you're making a case for a more expensive, complex course of action, the process requires more thought.
As you'll discover, this topic uses a fairly sophisticated example for illustrative purposes—so you can see how the entire process of creating a business case unfolds. In your role, you may not need to gather as much information as shown in the example or use complex numerical analysis.
While a business case similar to the example used in the topic may take 10 to 15 days to complete, your business case may take you only a couple of days.
The process vs. the product
过程与产品
Still, it is important to distinguish between the process of building a business case and the product you deliver to decision makers and stakeholders. The product is a document or presentation. Many organizations have their own templates and specific guidelines for how to create this product—including how to format the information, how to treat graphics, and so forth.
This topic focuses on the process of gathering the necessary information, analyzing it, and preparing to sell your ideas. After all, building a business case is about identifying and considering multiple alternatives before making a well-informed recommendation to support one option.The creation of  a document or presentation is the final step in this process—and can happen only
after you've completed the earlier steps.
Key Idea: How to build a business case
关键理念：如何构建业务案例
Key Idea
Regardless of the format of your document, you can use the following steps to prepare your case:
• Step 1: Define the opportunity—Describe the situation and the business objectives that your proposal will impact.
• Step 2: Identify the alternatives—Brainstorm multiple approaches and then  choose three to four to analyze.
• Step 3: Gather data and choose a time frame—Gather information about each alternative and estimate how long each option will take to implement.
• Step 4: Analyze data—Analyze how your options will affect the business     objectives you've defined.
• Step 5: Choose an alternative and assess the risks—Make a recommendation based on your analyses and evaluate how you will mitigate any risks   associated with your recommendation.
• Step 6: Create a high-level implementation plan—Identify, at a high level, how
you will achieve your goals and who will be accountable for each milestone. Spell out when you expect to see benefits.
• Step 7: Communicate your case—Create a document and/or a presentation     to sell your recommendation to decision makers.
You will need to complete each of these steps to build a strong business case. However, the depth of analysis and documentation necessary to support your case will likely vary, depending on the proposed initiative's scope, organizational impact, and risk.
Business cases can be used to demonstrate a wide variety of solutions. However, the process you'll use to build each case should be the same.
Leadership Insight: Make your ideas credible
领导力洞察力：让你的想法可信
Imagine you are the CEO of a big corporation, so many people walk up to you with big ideas, wanting you to invest in their ventures or in the ideas they are suggesting. How does a CEO decide whether he should go ahead or should not unless it is backed up with a good business case? And that is why I think backing up your idea with a good, sound business case is the most important thing if you want to take your idea ahead.
Let me tell you a few more tips about building up a business case. First, be sure of your facts, cross-check them, talk to people, make sure that whatever facts you are mentioning in your business case are verifiable and correct.
Point number two, make sure that your assumptions are realistic and achievable. We have this tendency to put in assumptions that will never be met and that would take the whole business case down when you are defending that case in front of the management. The third critical thing is to really be clear about your business case. Prepare it well. Put some amount of effort in it. It will go a long way in taking your ideas further. 
And last but not the least, communicate well — be able to stand up in front of the management and clearly articulate your idea and your business case so that people can understand well what you are trying to achieve. It gives so much more credibility to your ideas.
A proposal will only flourish with a strong, clear business case — so where do you start?
Identify the problem
找出问题所在
The first step in building a business case is identifying the problem you want to solve or opportunity you want to seize. Even if your boss has the idea and asks you to build the business case for it, you will still need a solid understanding of the issue at hand. Consider how you would describe the following situation, which will be used as an example throughout this topic:
Satellite Electronics' new strategy will require that 200 sales staff learn how to identify customers' needs and define the best solution, or set of products and services, to meet those needs. A competitor that recently adopted this approach has seen its sales per headcount increase 10% to 12%.
Sydney's group is already stretched to its limit with current assignments, and her boss has told her that no current projects can be eliminated or delayed. Sydney is grappling with the problem of how to best support the sales organization during its transition to the new strategy.
Develop an opportunity statement
制定机会陈述
When you confront a problem you begin to solve it.
–Rudy Giuliani
Once you identify the problem or opportunity at hand, develop a statement that describes the benefits that will come with solving the problem or seizing the opportunity. In other words, answer the question, "How will my group
/unit/company benefit from spending resources to address this issue?"
A strong opportunity statement for Sydney would be: "The training and development group will help increase revenue at Satellite by enabling the sales group to move from a product-selling to a solutions-selling approach."
When drafting your own statement, be sure to address the situation as an opportunity rather than a problem. Also, avoid the common mistake of defining the opportunity by describing your preferred solution.
For example, Sydney might be tempted to describe the issue as: "I need two more headcount to support the new sales strategy." This statement is too limited and would prevent Sydney from considering alternative solutions.
Leadership Insight: The essence of entrepreneurship
领导洞察力：创业精神的精髓
When I first came to Harvard Business School in the '80s, I met Howard Stevenson, who was one of our faculty — he was really one of the people who started entrepreneurship at the school. And he had a definition of entrepreneurship back then that we still use today.
And his definition, really, for me, sparks the essence of entrepreneurship — it really does capture it.
He defines entrepreneurship as the relentless pursuit of opportunity, without regard to the resources currently controlled. Now, I think that's a really neat definition, because it says that entrepreneurship doesn't have anything to do with the age of a company, it doesn't have anything to do with the size of a company, and it doesn't have to do with anything with the industry you're in.
It's really a way of leading, and a way of thinking about business that says that you're willing to get out there and actually get started before you've got all the resources lined up. It's relentless because you're at the edge. You're really trying to think about new ways of doing things that are going to solve big problems.
It's opportunity-driven, not risk-driven. You're not thinking about reducing risk, which is the way we think about managing in established businesses a lot, and the way we think about managing current operations. It's a way of thinking about opportunity driven: Where are the opportunities out there?
And finally, if you're on the edge and you're thinking about opportunities, you always have to get started before you've got all the resources lined up. So being able to go out there and find those resources and present that vision in a very compelling way is the essence of entrepreneurship.
Now, one thing you note is, it's not reckless. I didn't say the reckless pursuit of opportunity; I said relentless. Great entrepreneurs aren't reckless. They know how to manage risk. A lot of people think entrepreneurship is about getting out on the edge and actually being a risktaker.
Great entrepreneurs know how to manage risk. They know risk is really uncertainty, and that if you can step back and understand the uncertainty and plan for how you mighthave to manage it, then you can get started before you have all the resources and have everything lined up.
A way of leading that's opportunity-driven, not risk-driven.
Identify relevant business objectives Once you've written your opportunity statement, identify the most relevant business objectives.
Beyond the obvious financial gains, such as cost savings or increased sales, consider how seizing the opportunity you've defined will enable your company to achieve important objectives. To find out what your company considers important, examine the key business metrics it tracks—such as
employee morale, customer loyalty, environmental responsibility, and so forth. Often, a company's performance measurement system—for instance, a Balanced Scorecard or a dashboard— documents your organization's high-level metrics.
Even if some of your company's key objectives are difficult to measure in dollar terms—such as improved employee satisfaction—don't shy away from considering them. Be sure to list all the key objectives that might be relevant for your project. Prioritize business objectives Next, prioritize these objectives, choosing three or four to analyze. How can you narrow down your list? Ask yourself whose support you would need to implement your ideas, and who would be affected if your ideas were put into action. Consider how these stakeholders tend to make decisions and what business results are important to them.
For example, in the Satellite scenario:
• The vice president of finance might be most concerned with profitability.
• The vice president of sales may be particularly concerned with customer
satisfaction and revenue growth.
• The vice president of human resources (HR) might care most about employee
satisfaction, which drives sales-staff turnover.
After assessing these preferences, Sydney might identify the following objectives: (1) increase profitability and revenues, (2) improve customer satisfaction, and (3) reduce employee turnover. Map business objectives to metrics The next step is to identify metrics for each of the objectives you've defined. Later, once you've determined your alternatives, you'll use these metrics to measure the impact of each course of action on your chosen objectives.
In the Satellite example, Sydney ties each of her business objectives to metrics as follows:
• Increase profitability and revenues—Sydney decides it will be important to
  measure the impact of alternative proposals on the metric "sales revenue per
  person." Because both costs and revenues affect profitability, Sydney also
 determines to measure the one-time and ongoing costs associated with each
 alternative.
• Improve customer satisfaction—Satellite uses a performance management
  system that includes customer satisfaction as a metric, so Sydney decides she    will use the existing metric. She also decides to ask the sales and marketing
   departments if they use metrics such as "customer retention"—on the     assumption that the more satisfied customers are, the more likely they are to     keep doingbusiness with the company. And because loyal customers often       buy more, Sydney also considers using the metric "repeat sales."
• Reduce employee turnover—Because employee satisfaction affects turnover,
  Sydney decides to ask her colleagues in human resources to provide her with    data from the annual employee satisfaction survey as well as information     about employee turnover. She'll use the ratings from the survey as her "employee satisfaction" metric in addition to the existing "turnover" metric. She also opts to use "cost of employee turnover" as a metric. The cost of employee turnover derives from hiring and training costs, and any loss in productivity while new hires get up to speed. For a new sales employee, lost productivity takes the form of lost sales dollars.
For any business objective, there are many potential metrics to choose from. In addition to the financial and nonfinancial metrics described above, there are metrics based on time, quality, work habits, employee development, and so forth that may be appropriate for your business case. Also, your company may already be tracking metrics that are useful for your business case. If appropriate metrics currently exist, there's no need to invent new ones.
Key Idea: Generate a list of alternatives
关键思想：生成备选方案列表
Key Idea
While building a business case, it's vital to brainstorm a full set of alternatives rather than latching on to the first one or two good ideas that occur to you. The following pitfalls can prevent a manager from developing a comprehensive list of alternatives:
• Restricting the list of choices to the first solutions he or she considers.
• Having a "limiting" mindset, such as believing that "consultants should never be used" or that "consultants should always be used."
• Having a strong preference for a particular solution at the outset of the process and therefore failing to explore additional possibilities.
• Failing to consider the status quo (the current condition) as an alternative.
To avoid these traps, convene a group of stakeholders and ask them to brainstorm ideas with you. These stakeholders are the people that would be affected by the outcome of your proposal—but could be either internal or external to your organization. Record the results of the brainstorming on a flip chart or white board, without judging them or discussing their potential pros and cons. Your goal is to generate as many feasible alternatives as possible.
Your first solution isn't always the best. Brainstorm a list of alternatives with key stakeholders to make sure you consider all the options.
Ask for input Always think outside the box and embrace opportunities that appear, wherever they might be.
–Lakshmi Mittal
Since a big part of building a business case is selling your idea, it makes sense to identify and talk with stakeholders early in the process so they feel more involved. And you'll also learn what they value most—so you can better appeal to their interests in your final presentation.
When Sydney conducts her brainstorming session, she invites her team members as well as key people in sales, finance, and HR. The participants come up with a long list of ideasfor enabling the training group to help sales adopt the new solutions-selling strategy.
These ideas include "add FTEs in training department," "hire curriculum consultants," "use outside classroom facilitators," "cancel low-priority existing projects," and many other possibilities.
After generating a list of alternatives, meet with other stakeholders to get additional ideas for alternatives, as well as insights into the possibilities you've generated so far. Talking with trusted advisors at this stage is also prudent.
For example, if after talking with other stakeholders Sydney discovers that Satellite's finance and human resources departments have implemented a hiring freeze during the current fiscal year, she could decide to omit the alternative "add FTEs in training department" and focus instead on ideas such as using a training consulting firm or hiring outside classroom facilitators. Even if she decides to keep the FTE alternative under consideration, she'll want to show why she believes it's an important possibility and how it compares to using a consultancy or hiring outside contractors.
In the end, Sydney ends up with the following list of alternatives:
1. Try to support the new sales strategy with the existing training staff (the status quo option).
2. Add two permanent headcount in the training group who will focus on implementing the new training.
3. Add two contractors to focus on the implementation.
4. Hire a consulting firm to do the work.
5. Borrow people from sales to help implement the training.
Narrow your choices
Once you have received input from stakeholders, it's time to narrow your list of alternatives down to the two or three options—in addition to the status quo—that will best address your business objectives and stakeholders' needs. 
Strategies for narrowing down your choices include:
• Combine any alternatives that could reasonably be implemented together.
• Eliminate elaborate, high-risk options.
• Favor the easy-to-implement over the complex and difficult.
Don't spend too much time agonizing over this step. Instead, go with your intuition about which choices seem the most feasible and likely to meet your objectives. At this stage, you will likely want to depend more on your hunches and professional judgment than a careful analysis of each alternative.
Consider Sydney's case: Since she knows that Satellite executives will resist adding permanent headcount immediately, she decides to combine her original options 2 and 3 into a single solution: hiring two contractors with the intent that they may become permanent headcount in a year. She also knows that sales is already understaffed, so she deletes option 5 (borrowing people from sales to implement the training).
Thus, her final list of alternatives is:
1. Hire a consulting firm to develop and deliver the training.
2. Add two contractors to provide the training, with the option to hire them as
permanent employees after a year, if necessary.
3. Try to implement the new training with the existing staff (the status quo option).
Activity: The best way to generate alternatives
活动：生成备选方案的最佳方法
Don't latch onto the first good idea that comes to mind for seizing the opportunity you've identified. Instead, generate alternatives.
Identify the information you need
确定您需要的信息
List all the information you'll need in order to compare your choices. How do you determine the needed information? Look again at the metrics you've chosen for each of your business objectives. Ask yourself what data you'll need to gather for each metric.
For example, Sydney would start by examining the business metrics she defined. Keep in mind that Sydney's business case is robust. Depending on the scope of your business case, you may not need to gather nearly as much supporting data as Sydney.
Sydney might want to obtain the following data for the metrics she wants to track:
• Sales revenue per person—The number of dollars in sales each person would generate for each scenario.
• Cost of each alternative—The one-time and ongoing costs associated with each of her three choices.
• Customer satisfaction—Historical customer-satisfaction ratings from the company's performance management system, plus anticipated ratings for each scenario.
• Customer retention—Historical customer-retention rates from the sales and marketing departments, plus anticipated retention rates for each scenario.
• Repeat sales—Figures on the repeat sales typically generated by retained customers, and estimates of how many customers would be retained given each of the three scenarios.
• Employee satisfaction—Historical employee satisfaction data from HR surveys, plus educated guesses about how employee satisfaction might change in each scenario.
• Turnover—Historical turnover rates, and estimates of how each scenario might affect turnover.
• Cost of employee turnover—Typical costs of hiring and training sales people, plus information from sales about how much revenue is lost when a new sales employee is ramping up.
Wherever possible, you should start by obtaining historical and/or typical data. You'll then want to forecast changes in that data that would result from each of the alternatives you're comparing.Gather the data 
The best preparation for good work tomorrow is to do good work today.
–Elbert Hubbard
The information you want probably won't all be in one place. You'll have to do some digging. Sources to consult include:
• Internal colleagues in human resources, finance or other departments that might have access to key business performance metrics
• Colleagues and friends outside of your organization that have proposed a similar initiative or project
• Industry journals and reports
• Industry experts
• The Internet
• Consulting firms with expertise in the choices you are considering
Consider consulting several sources for each piece of information, to get the best estimates possible.
Set a time frame
设定时间框架
Once you've gathered your data, estimate a time frame for implementing the initiative and achieving the benefits of the opportunity you've defined, given each of the alternatives you're considering. Also consider how long it will be until the project delivers its estimated benefits—it may be a year or two, or longer.
In Sydney's case, she would gauge how long it would take her group to provide the solutions-selling training in each of the three scenarios she's exploring, as well as the time needed for the sales force to realize 100% of its target benefits.
To set a time frame, ask:
• When would the initiative get under way?
• Would it be phased in over the course of one year, three years, or more?
• Would it be synchronized with calendar years, fiscal years, or other initiatives?
• Would it have a clear end point at which all its benefits would be generated?
Setting a time frame requires a lot of estimating.
For example, in the Satellite scenario, Sydney calculates, in rough terms, how long it would take to provide the sales training with her current staff versus how long it would take if she hired a consulting firm, or used two contractors with the option of hiring them permanently. Next, she estimates how long it will take the sales force to come up to speed and realize target benefits. Finally, she projects out a year or two for the time until the benefits of the project will be fully realized and provide competitive advantage.
Document your estimates and assumptions
记录你的估计和假设
When you make estimates like these, record the information you're using and the assumptions you're making. Documenting in this way will enable you to explain your reasoning to anyone who asks.
For example, Sydney assumes that Satellite's customers would respond to the solutionsselling approach in the same way that its competitor's customers did. She can get these revenue increase assumptions from the internal group (e.g., finance, strategy, etc.) who put together the rationale for moving to this strategy.
Among other estimates, Sydney will also need to approximate the financial costs for each alternative. For example:
• The consulting option: She would start by asking the consulting firm for fees and costs they have incurred in the past, and then look to similar projects she might have carried out in the past.
• The contractor option: She would ask the hiring manager about the costs
associated with hiring contractors, and then would consider what turning them into employees might cost.
• The status quo option: She would build in the cost for her current staff to do the work.
Once Sydney has the numbers she needs, she'll need to document her sources. She'll want to describe what is included—and excluded—for each of her costs. She'll also want to predict any expected variations.
Documenting your estimates and assumptions also helps you evaluate any new information you gather later in the process. You can easily compare it against the information you used for your original analysis.
Evaluate alternatives against your metrics 
根据您的指标评估备选方案
In most companies, executives want to know the financial implications of each of the alternative courses of action presented to them in a business case. That is, they want to know an alternative's possible impact on revenues, its return on investment for the time period you selected, its payback period (when its benefits will pay for the resources invested in it), and so forth.
Many managers who lack a strong financial background worry about their ability to provide this information in their business case. You won't necessarily do such financial analyses yourself— unless, of course, you want to do them. If you don't, ask someone in the finance department or a peer who is an expert in finance for help.
You ultimately want to show each alternative's impact on the metrics you've defined, as well as on the financial metrics of interest to top management.
Common financial metrics 通用财务指标
The following are some common high-priority financial metrics:
• Payback period—The time that transpires before an investment pays for itself; the length of time needed to recoup the cost of an investment.
• Net present value (NPV)—The economic value of an investment. You calculate NPV by subtracting the cost of the investment in your proposed alternative from the present value of the investment's future earnings. Because of the time value of money, the investment's future earnings must be discounted in order to be expressed accurately in today's dollars.
• Return on investment (ROI)—A financial ratio measuring the cash return from an investment relative to its cost for a stated period of time.
Choose the financial and nonfinancial business performance metrics and calculations that best meet the needs of your audience and are most appropriate for your business case.
Key Idea: Create a framework for comparison
关键思想：创建一个比较框架
Key Idea
At this point in building your case, you've estimated each of your alternative's financial ramifications and considered their impact on any nonfinancial metrics you've defined. Now document your conclusions so they are easy to compare. Try to turn as many conclusions as possible into specific dollar amounts.
Not every alternative has potential impacts that can be expressed as dollars or measurable improvement in business metrics, however. In such cases, consider creating a pros and cons table. Use this table to capture positive financial outcomes and nonfinancial advantages as well as any negative financial outcomes and disadvantages. While many organizations have prescribed formats for evaluating and comparing alternatives, starting with a simple pros and cons table is an easy way to document your thinking in one place.
How do you decide on the best possible solution when your alternatives can't be expressed in terms of financial impact or direct improvement in business metrics?
Leadership Insight: Test your assumptions
领导力洞察力：测试你的假设
When developing a business plan, whether you're doing a business plan for an established company, a new business in an established company, or whether you're doing it for a brand new business, most people spend way too much time focusing on the numbers and not enough time focusing on the assumptions behind the numbers.
Those assumptions might include the size of the market and how big you think it's going to be. But the only thing we know with certainty, when you get started with a business plan, is that the assumptions you're using will be wrong. And your job, as an innovator or a business — an entrepreneur — is to decide how wrong, where wrong, and whether or not the areas of uncertainty could actually become fatal flaws.
A good example of this is when you think about the Amazon.com business. Jeff Bezos was an analyst. He was used to running the numbers, and actually came up with the idea for Amazon.com when he was still working as an investment banker looking at where the Internet might make the most impact.
And he thought it would have tremendous impact on commerce, on how we buy and sell. But he also recognized that the easiest place to start was going to be in online books. So he stepped back, looked at the assumptions behind the book market, all the while knowing that the bigger market was there for many other different kinds of online retail.
He actually developed the business plan driving cross-country. While his wife drove and he sat in the car and kind of sketched out what he thought those numbers would be and what his assumptions were about the business itself. When he got to Seattle, they actually started building the business in his garage.
And, initially, it was just a Web site and his lack of certainty on the assumptions behind the business. They actually hooked up a bell to the computer, so that every time a sale would come through, it would ring the bell. Because they didn't think they were going to have that many orders.
Truth of the matter is, by the end of the first week, they had to disconnect the bell, because it was going off all the time. So, it was those assumptions — he had an assumption that this was going to be a big market, that they could develop a technology product that people could use to buy books online and that he was going to be able to get the resources.
But he tested those assumptions first with something that decreased the risk.
Prevent wrong assumptions from becoming fatal flaws.
Alternative one
备选方案一
Before creating her pros and cons table, Sydney gathered the following information on her three alternatives and made a series of assumptions. Depending on the scope of your business case, you may not need to perform such a thorough analysis. Sydney's analysis for her first alternative yielded the following assumptions:
Hire a consulting firm
请一家咨询公司
 Impact on sales. Sydney found a consulting firm that specializes in solutions selling. She asked Satellite's vice president of sales for an estimate on how using the consulting firm's methods would affect sales. He estimated that this choice would result in a 10%-20% increase in sales. Her competitors saw increases of about 10%. Sydney decided to use the 10% number for her analysis, which translated into $7 million in additional sales by the end
of year one.
• Costs. The cost to hire the firm for one year would be $2 million.
• Impact on customer satisfaction. She believed the consulting firm would be more effective at improving customer satisfaction because of their experience in this area. A partner at the firm estimated that customer satisfaction would improve by 10%-15%. She  selected 10% because she could not confirm whether this firm inflated their expected results and she wants to provide stakeholders with realistic numbers.
• Impact on employee satisfaction. Sydney also assumed that sales employees'
satisfaction would increase 10% owing to the expected higher sales and resulting higher compensation. However, she believed that some members of her team might be upset that a consulting firm was hired to do their work, which may decrease employee satisfaction in her team. As a result, one to two members of the training group might leave if she chose this option.
• Impact on turnover. She consulted Human Resources, which estimated a cost of $50,000 to hire and train two new employees in her group if staff did leave.
Alternative two
备选方案二
Sydney's analysis for her second alternative yielded the following assumptions:
Add two contractors—with the possibility of permanent hires later.
• Impact on sales. If Sydney hired contractors and oversaw the project herself, she estimated she would not be as effective as the consulting firm, because she has not managed this type of transition before. She therefore estimated she would get an increase of $5 million in sales by the end of year one.
• Costs. Hiring two contractors for a year would cost $500,000.
• Impact on customer satisfaction. Sydney feared that customers wouldn't be as satisfied with the results produced by contractors as with those generated by consultants who were experts in the area. She therefore estimated that customer satisfaction would improve only 5%.
• Impact on employee satisfaction. She assumed sales employee satisfaction would increase 10%, again owing to the higher sales and therefore higher compensation.
Alternative three
备选方案三
Sydney's analysis for her final alternative yielded the following assumptions:
Status quo option—do the training with her existing staff.
• Impact on sales. Because her group didn't have experience implementing this new approach, she estimated that it would take them six months longer than the consulting firm to complete the project. She also believed that her group would not produce the same quality of work as the consulting firm. Thus she estimated a sales increase of only $4 million per year. She also estimated that due to her group's previous commitments and steep learning curve, this increase would not start until 18 months into the project.
• Impact on customer satisfaction. She estimated that customer satisfaction would be similar to that of the contracting option—a 5% increase.
• Impact on employee satisfaction. Sales employee satisfaction would increase 10%, as in the other two options.
• Impact on turnover. Because her staff was already overextended, Sydney estimated that it would take at least three months before she and her group could focus any attention on developing the new training. Once the effort began, she believed that her existing staff might become so overwhelmed that one to two members might leave, thus incurring a cost of $50,000 to hire and train two new employees. During those three months, she estimated that at least one sales professional would leave in search of higher commissions at a
competitor who had already implemented the solutions-selling approach.
Select the best solution
选择最佳解决方案
Once you've compared the pros and cons of your alternatives, you'll need to select the best possible solution—and justify your choice. Some companies track data on how various metrics affect their overall financial performance (for example, how customer satisfaction influences sales). If your company has this information and you can attach dollar figures to each of your metrics, then your selection process may be as simple as adding up all the numbers and making a
comparison.
However, you probably won't have all of this information at hand. You'll need to come up with a strategy for making your choice. This isn't an exact science, so you'll have to rely on your intuition and best judgment, as well as input from others. Remember to document your rationale so you can explain it to others later.
In the Satellite example, Sydney reviews her pros and cons table and identifies the choice whose benefits she thinks best outweigh the costs: hiring the consulting firm. She reasons that this option would:
• Generate the highest revenue increase in the quickest time.
• Give the company access to expertise that would reduce the risks inherent in
introducing a new selling strategy.
• Yield the highest increase in customer satisfaction.
• Improve sales employee satisfaction and thus reduce turnover (and possibly attract talent) in the long term.
Consider the risks
考虑风险
What you have to do and the way you have to do it is incredibly simple. Whether you are willing to do it is another matter.
–Peter F. Drucker
Once you select an option, identify the potential risks to you and the organization before you commit to it. Think about the risks to:
• The implementation of your idea—Do you have the right people to accomplish the necessary tasks? Can you meet the necessary schedule with your resources? What would happen to the organization if you cannot meet your goals and timelines?
• Your peers and organization—What would happen to your peers and the organization if you don't make the numbers you expected? For example, if your projections are built into your organization's metrics and are rolled up to the corporate commitments for the head of sales, could his or her career suffer if you don't achieve the projected gains? Are there other risks in terms of members of the sales team leaving the organization once they have higher skill levels?
• You—What are the possible career consequences if your alternative fails? For example, depending on the size of the project and the amount of resources you need, your performance rating might be affected, you could lose credibility, or you could be let go.
Also consider your personal tolerance level for risk, as well as your organization's tolerance level.
Activity: Assess that risky business
活动：评估风险业务
Once you've selected a solution to present in your business case, you need to weigh the risks associated with that solution. Practice identifying some typical sources of risk.
After weighing several potential solutions to Glasswell Optics' website problems, Eric has decided to split responsibility for the website hosting and customer-data management to different hosts. But he knows he needs to consider the various risks that may be associated with this solution if it fails. First he considers risks to himself.
Conduct sensitivity analysis
进行敏感性分析
Ask someone in your finance department to help you analyze what would happen if you changed some of your assumptions or your estimates changed. This process is known as sensitivity analysis. For example, what would happen to your organization's bottom line if sales revenue increased only 5% instead of the 15% you predicted—or if it increased by 20%? You might decide that the alternative you've chosen to advocate for would no longer be feasible.
Another way to conduct a sensitivity analysis is to describe a worst-case and best-case scenario, and to share both of them in your business case.
Mitigate the risks
降低风险
Consider how you might mitigate the risks you've identified.
For example, in the Satellite scenario, Sydney reasons that hiring contractors is time consuming: she may not be able to find anyone with the right expertise to do this type of project right away. Therefore, this alternative poses the risk of delaying revenue gains three to six months beyond the consulting option. If this occurred, the sales group wouldn't meet its target numbers for the year. Sydney considers whether to eliminate this option, even though the cost of hiring the contractors would be far less than hiring the consulting firm.
Sydney also thinks about the risk inherent in negotiating the contract with the consulting firm. The consultancy might want more than $2 million to do the work. To mitigate this risk, she considers using Satellite's best negotiator or even involving her company's vice president of procurement to ensure a well-handled negotiation.
Modify your recommendation if necessary
必要时修改您的建议
Deciding how you mitigate risks helps you refine your recommendation even further. If two of your alternatives offer roughly equal benefits, you may want to compare their risks. If your initial recommendation is too risky, you may decide to modify it or even abandon it for a different alternative.
For example, based on her initial analysis, Sydney was leaning toward the option of hiring two contractors. But after considering the risks, she thinks about hiring the consulting firm instead and then hiring two contractors to maintain training and support for sales.
Also keep in mind that for any alternative that requires an increase in headcount or budget dollars, your request for additional resources could be denied. Prepare another option, even if it seems less desirable. Clearly define the negative impact and missed opportunities that would result if
resources were not allocated toward your project.
In Sydney's case, if her request for funding to hire the consultancy is refused, she might have to resort to using her own people to implement the new training. She would then be forced to drop several projects so her staff could take on the new project without becoming overloaded. This decision would be especially problematic as her boss has told her that no current projects could be eliminated or delayed.
What is an implementation plan?
什么是实施计划？
Your implementation plan lays out how you intend to track your progress and measure your success if your proposed solution is put into action.
Many managers think of an implementation plan as a list of action items, due dates, and the people responsible for them. Decision makers reading your business case will certainly want to know this information. But they'll also want to know the following:
• The primary milestones
• The individuals responsible/accountable for each milestone
• The resources required to reach each milestone
• Dates when the company will see the benefits of your recommended course of action
• Impacts on the company's expense and headcount budgets
• Increases in revenue
• Your plan for demonstrating that the solution's intended results have been realized
Keep in mind that while decision makers will want to understand each of your milestones to ensure that your project is feasible, they do not need the details of how you will accomplish each milestone.
List your milestones
列出你的里程碑
Begin developing your implementation plan by listing the major steps needed to carry out your solution. (Resist any urge to write down every little detail of your project plan.) These major steps are your milestones. Include notes about how you plan to address any risks. For example, document that you will start with a pilot training project or use a skilled negotiator in the contract phase.
If there are definable phases to the project, consider listing your milestones by phase.
In the Satellite example, this list would take the following form:
• Phase 1 (1 month)—Hire the consultant using the VP of procurement to negotiate the contract.
• Phase 2 (6 months)—Develop training, conduct pilot training, evaluate pilot, and collect sales results.
• Phase 3 (3 months)—Roll out training to all sales people and sales coaches.
• Phase 4 (1 month)—Track results; forecast improvement in sales, customer value, and employee turnover to establish business results targets for the next year.
• Phase 5 (ongoing)—Modify financial targets for sales on an ongoing basis.
Check in with decision makers
与决策者联系
Depending on the nature of your proposal, you may also want to establish explicit check-in points with decision makers to assess progress toward your stated goals. These check-in meetings usually occur after completion of a project phase. During the meetings, decision makers review the status of your project and advise you on any needed mid-course corrections.
When you present your milestones to decision makers, expect that they will want the project done much sooner than your estimated final delivery date. Anticipate negotiations about the timeframe.
Be prepared with a back-up plan for how you could complete phases more quickly, or develop a convincing argument for why accelerating the project implementation would be too risky and would not achieve the intended results.
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