To develop a successful business case, you must accurately determine who the decision makers are and the criteria they will use to make the investment decision.
DECISION MAKERS AND DECISION CRITERIA
o develop a successful business case, you must accurately determine who the decision makers are and the criteria they will use to make the investment decision.
Who approves the business case depends on how the company is organized, as well as the size and scope of its activities.
If your company is very large, decisions for new products and services may lie with a division president, rather than with the CEO or chairman of the board. If your company is very small, perhaps only the owners or partners are the decision makers.
Sometimes one person makes the decision, while in other circumstances the decision may lie on the opinions of a group of people.
As you prepare your case, you need to determine the groups that will decide the feasibility of your project and document their details by name, responsibility, and decision-process role. Make sure the highest-level decision maker is accurately identified.
Some suggested groups of people who may be the decision makers within your company include
- company owners and executives
- corporate directors
- stockholders
- research and development representatives
- sales and marketing representatives
- financial services and accounting representatives
To make a decision to commit to a project, company owners and executives will want to satisfy themselves that the following questions about the product or service have been properly answered:
- How does the new product or service relate to the present business?
- What business value will the product or service achieve?
- How much will it cost to develop and market the new product or service?
- How will this cost affect company profits?
- How does the new product or service relate to our corporate strategy?
Corporate directors and stockholders will want to know the following:
- How is stock going to be affected by introducing the new product or service?
- What will be the cost of the new product or service?
- How will the cost affect stock dividends?
- Are the financial projections healthy and realistic?
- How much will it cost to develop and market the new product or service?
- What are the financial risks associated with developing the product or service?
Sales and marketing may be interested in whether the project will satisfy consumer needs profitably:
- Is there a market for this product or service?
- Is the market ready for this product?
- What similar products or services are being offered by competitors?
- How will we price the product?
- What retailers would carry the product?
- How would we promote the product?
Finally, the Research and Development Department will ask the following questions:
- Do we have the expertise to produce the product or service?
- Will we need to modify this product for production?
- What would it cost to modify?
- Are there any possible production problems?
- Where will we get supplies and raw materials?
- How reliable and secure are these supplies?
Decision criteria are factors (both tangible and intangible) used by decision makers to determine the attractiveness of investment alternatives.
A CEO concerned with enterprise strategy and operations may be interested in different benefits than an accounting communications manager responsible for reducing the costs of phone services.
There are a number of common pitfalls in identifying criteria:
- asking the right people, who give wrong answers (either inadvertently or on purpose)
- getting the right answers from the right people, but then having the business case team inadvertently misinterpret such remarks
- being unable to contact the right people because they are unavailable or have not been identified
- overlooking valuable secondary sources, such as publications
In order to be confident that the business case you propose addresses the key decision criteria, you should work through the following steps:
- identify at least one criterion for each decision maker
- link the value of your product or service to personal concerns of individual decision makers
- express criteria in language understood by each level of decision maker
- express each criterion in terms of a benefit to be realized
- weigh all criteria to indicate their relative importance to the decision
One way to find out details about the decision criteria is to conduct a brainstorming session with all decision makers or their representatives.
During these sessions, you can find out about any concerns decision makers may have, but also about any other goals or opportunities that may arise in the future.
Other recommended ways of finding out details about your decision criteria include:
- reviewing publications from vendors, consultants, and other groups knowledgeable in the area being evaluated by the business case
- asking expert acquaintances in the subject matter of the content of the business case
- talking to "organizational neighbors"
- searching through business articles profiling similar cost-benefit analysis
Correctly identifying the decision makers allows you to
IDENTIFY FACTORS
Correctly identifying the decision makers for a business case helps to identify the factors that will influence the decision makers with regards to a business case.
DISCOVER CRITERIA
When you know who the decision makers are, you can then go on to discover the criteria that are important to them when considering a business case.
FOCUS RESOURCES
Correct identification of decision makers helps to focus the team's resources on areas that are important to the final investment decision, increasing the business case's chance of success.
GATHER INFORMATION
It helps to understand the information requirements of the different decision makers, allowing you to gather the information suited to their needs.
QUESTION
Identify the benefits of correctly identifying the decision makers of a business case.
- It helps to identify the factors that will influence the decision makers with regards to a business case.
- It helps when selecting the team required to produce the business case
- It helps to focus the team's resources on areas that are important to the final investment decision
- It helps when developing the information requirements of the different decision makers
When you know who the decision makers are, you can then go on to discover the criteria that are important to them when considering a business case.
The decision makers do not produce the business case.
Your team can concentrate on the areas that are important to the decision makers, increasing the business case's chance of success.
Identifying the decision makers allows you to gather the information suited to their needs.
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 # 006-13