Building a business case is important to more than your improvement project, it should be one of the pillars of your decision making. A business case helps you understand why a decision is necessary, what you anticipate the solution to look like and how it will help you reach your long-term organizational goals.
Business Case Components
Strictly speaking a business case is the first direction you take in describing your project to the people who will okay the resources and the team working with the resources. At its core a business case should have the following components:
- A definition of the end product/ service that you sell to your clients.
- How your team will measure the output.
- A primary baseline (how can you measure and interpret results if you don’t have a starting line).
- An explanation of the performance gap and how that affects your business objectiv
What doesn’t it do?
A business case does not provide a magic bullet. What it does do it allow you to logically create a path to alternative solutions. The business case does not work if your team has not made a cohesive acceptance of the proposed alternative, in the case of differing opinions it may actually serve as tool that further divides the team.
Why it does work
It works because it creates focus and more often than not project teams lack a sense of focus. The best business cases create a uniform goal and team rationale. When constructing a business plan, it’s my belief that this is what you should strive for.
Change is hard and as with all of my posts, I believe in the guidance of a good belt. Talk with your belt and have a conversation about your challenges and your thoughts on solutions. Your belt is not your guru, they are a part of your solution. Utilize them.
The great thing about Six Sigma is that it puts you into the habit of seeing things in an ordered and identifiable view. This skill is highlighted in the way Six Sigma teaches you how to select projects. Project selection is the single most important decision you will make for your improvement initiative. If you pick the wrong project, it will kill your resources and your revenue. If you pick the right project you can create a new culture, introduce a new way of thinking and make a truly remarkable company.
In picking projects there are 3 core components to consider: the business case, the project charter and the benefits analysis.
The Business Case
In Six Sigma you will hear a lot about the business case and how a strong case correlates to a strong project. The business case is a the document that your improvement effort will build to answer why there needs to be an improvement and what type of improvement you will use. This document is typically used to convince sponsors of a project’s necessity.
The project charter is what you will use to tell the project team what improvements you are doing and how you will measure their success. Project charters are much more detailed than the business case and often serve as a guide for the project manager. Your belt will be able to help you determine which specifics your charter needs.
Now I know this sounds like a fancy business word, but a benefits analysis is where you will win or destroy support for your project. The benefits analysis is the financial projections for your improvement project and in my opinion, a benefits analysis should be done prior to building a business case. The analysis is designed to tell you what is to be expected in terms of resources, financial investment and returns on those investments.
Selecting a project is one of the most important steps in an improvement process and as with all these blogs this is a summary, your belt will be able to guide you through picking a project and designing a process that works best for the culture of your organization.