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BPI Business Case- Design High Level Phase

Blog: Biz-Performance, David Brown

BPI Business Case- Design High Level Phase


  • A formal declaration of the compelling reasons (or ‘value proposition’) for moving the     organization into the ‘To-Be’ environment. It proves to top management and the organization that the investment and upheaval (and discomfort) that the change will cause is warranted by the quantitative and qualitative pay-off of the ‘To-Be’ State.   
  • It quantitatively demonstrates the financial justification of the new design and the opportunity cost of not changing, and qualitatively, unequivocally and crisply conveys that the status quo is not a viable alternative for the organization.   
  • The Business Case includes the following elements: identification, qualification and validation of the design opportunities; financial payback with quantifiable benefits and costs of the proposed changes, assumptions, constraints and risks; and timing considerations as stipulated in the Migration Plan. A well-formulated Business Case can represent a +/- 30 percent level of accuracy at this phase of the Program.

Client Value

  • The Business Case presents the financial justification (the ‘so what’) for the new design to enable senior management’s informed judgement about further pursuing the design. It is based on prudent estimates of expected costs, new revenues, paybacks, and organizational results    of implementing and adopting the new design.
  • It provides a clear understanding to the executives and organization of the scope and objectives associated with the defined changes, as well as their benefits and business-performance expectations. It sets goals for individuals and the organization as a whole, against which each will be measured.
  • The Business Case forces the organization to articulate and quantify (in monetary terms) the detailed and discrete benefits expected as a result of the new design. Benefits such as new revenue; market expansion and penetration; customer acquisition; retention and loyalty; are often promised but seldom measured and attained.
  • It serves as a communication tool with very tangible collateral for a motivated, courageous, bold client leadership team to uphold the momentum and desire for the organization to keep moving toward the ‘To-Be’ state.
  • Neglecting to demonstrate to both senior management and employees the extent to which the benefits of the proposed changes outweigh their implementation costs and the status quo will jeopardize the progress of the program.    


The Business Case amalgamates much of the work accomplished in the “Design High Level” phase and converts it into financial implications. It must prove the need to change from the current state and to implement the designs laid out in the Migration Plan, by creating a financial profile that defines the opportunities associated with the implementation of the change.
The opportunities are defined in terms of the cost to implement and sustain the change and benefits that will be realized due to the change. Quantifying the benefits requires creativity, as not all benefits are cost-focused. Intangible or non-financial benefits are translated into profit and loss terms. Quantifying costs to implement and sustain will not be exact, since full details will not be known during the Design High-level phase (level of accuracy of +/-30% is the nearest expectation).
The BPI Program is composed of numerous discrete projects related to each other as defined in the Migration Plan. The Business Case reflects the Migration Plan, quantifying and calculating the implications of the various projects, scenarios, assumptions and dependencies. Similar to the Migration Plan, the Business Case aggregates the individual benefits and costs of projects into a single scenario. In fact, it is inevitable that the Business Case and Migration Plan will be revised and adjusted several times before the agreed-upon scenario is confirmed.
Additionally, a benefit tracking-mechanism (which works in conjunction with the ‘To-Be’ Measurement Dashboard) is specified to track the costs and benefits established in the Business Case.
  1. Identify/confirm the format of the Business Case, based on its defined purpose and the client’s financial requirements.    
    1. Ensure that answers to the following are clear:       
      1. Client’s need for precision and accuracy (on both the cost and benefit side, and on the visibility of time frames monthly, quarterly, annually)
      2. Level of financial analysis (cost categories, level of sophistication, internal rates of return, returns on investment, financing options, profit and loss impacts, cash-flows, paybacks, etc.)       
      3. Governing financial assumptions (capital versus. expense, obsolescence, depreciation, interest rates-both financing and saving, internal hurdle rates, inflation, currency exchange rates, economic outlooks, incremental revenue margins, etc.)
      4. Format of presentation (quantitative-financial or qualitative-graphical)
      5. Audience (middle management, senior management, executives, CEO,board of directors or employees)
      6. Will of management to dedicate its own resources to the effort.   
    2. Be sure to understand a number of the client’s philosophical dispositions: i.e. expectations that the program will be self-funding versus funding it through a one-time impact on the profit and loss statement; hopes of the technology cost being distributed and justified across the component projects that benefit from it versus counting it as a one-time cost without specifically assigned benefits to justify it; and the client’s acceptance of ‘soft’ benefits such as potential for revenue generation to be used to justify large investments versus using ‘hard’ benefits only. The following will assist in this process:       
      1. Review Business Case requirements with client sponsors, team and     financial organization.
      2. Identify key client decision-makers who will be involved in approval of the results, delivery or implementation of the project.
      3. Review previous project justification documentation.
      4. Develop straw-man Business Case framework.
      5. Develop straw-man executive review and authorization process, including timing, sequence of communication and individuals involved.
      6. Review/validate Business Case approach with client management team (i.e. Executive Steering Committee).       
    3. Develop a cost profile for each project.       
      1. Based on the type of financial analysis required by client, develop the cost profile for each project that is a part of the Migration Plan and Business Case. It is crucial to account for every critical cost factor. Some categories are: detail design, build, implement, support, change campaign, organizational resistance, training, technology implications, hardware, software, purchases, modifications, networks, architecture, communication costs, programming, data migration, legacy system integration, CPU upgrades, PC skill levels, PC purchases, dependencies on other projects, organizational acceptance, ability to absorb, facilities, inventories, equipment retooling and purchases, vendor contracts, severance and hiring cost, etc.
      2. Perform a cost/benefit analysis (Cost/Benefit Analysis).
      3. Develop a cost profile.
    4. Develop a benefit profile for each project.   
      1. Be aware that quantifying benefits requires creativity, since not all benefits are cost-focused. The redesign ideas will identify many benefits that are revenue-generating. Such benefits include, for example: new products, better products, more products, strategic pricing, value selling, revenue management, customer     segmentation and targeting, distribution channels, customer acquisition, retention, loyalty, alliances, productivity, etc. Calculations used to derive the opportunity and benefits are also included.
      2. Develop a benefit profile format.
      3. Review the format with the project team.
      4. Complete the benefit profile.
      5. Identify additional information to include in the Business Case summary
    5. Include information such as: opportunity description, analysis findings that support the validity of the opportunity (quantitative and qualitative information), a review of the ‘To-Be’ designs, assumptions, risks and constraints around the opportunity. Show clear affirmation of the (Confirmed) Business Vision in the objectives of the project, as well as of the Critical Success Factors, Key Performance Indicators and Shared Values and Guiding Principles.   
    6. Confirm performance measures and map to benefit profile   
    7. Ensure that indicators to be used to evaluate the achievement of the benefits over time also relate to the ‘To-Be’ Measurement Dashboard. These indicators are used to track the specific benefits of the project back to the goals articulated in the Business Case.   
  2. Validate the information with key clients and identify preferred scenarios.
    1. Review and validate the opportunity information with the client sponsors who will be accountable for delivering the defined benefit(s) of each project.
  3. Consolidate individual project information into a single summary that is consistent with the defined Business Case format and the Migration Plan, and reflect the various scenarios defined in the Migration Plan.
  4. Pre-present Business Case to decision maker(s)/Executive Steering Committee   
    1. Plan and schedule one-on-one reviews with appropriate decision maker(s)     and/or Executive Steering Committee   
    2. Conduct pre-present sessions   
    3. Update and revalidate opportunities and business case with appropriate client.   
    4. Alter the Business Case to reflect the scenarios identified during initial pre-presentations.
    5. Develop and present the final Business Case to client decision maker(s)/Executive Steering Committee.
      1. Be aware that the final presentation should be a group confirmation of   the benefits associated with the subsequent implementation efforts    
    6. Communicate the Business Case to the entire organization consistent with the     Communication Plan. This is a high-visibility event led by the chief executive, and various media are used to disseminate the message.



  • Know that identifying benefits versus isolating costs is a critical element of the BPI Program, as well as developing the Business Case. When clients have an inherently cost-focused culture, development of the benefits will center around cost reduction, cost containment and a detailed analysis of implementation cost. The client’s energy is better spent focused on the real benefits of ‘what-could-be’ and the identification of the creative opportunities from revenue increases and customer satisfaction. These benefits include: new products, better products, more products, strategic pricing, value selling, revenue management, customer segmentation and targeting, distribution channels, customer acquisition, retention, loyalty and alliances,
  • During     the course of brainstorming and evaluating benefits, be aware that the team is likely to identify benefits that are quantifiable but cannot be translated into a dollar payback. These may include improving response time to customer inquiries, reducing the number of contacts required to complete a transaction, and improving the timeliness and accuracy of information. If the impact of the improvement is significant for customers or the organization, these quantifiable benefits may be used to augment tangible benefits.
  • Know that intangible benefits that cannot be quantified, such as improved employee morale, will also be a factor. Document and describe these benefits. Be aware that the team should not seek an exhaustive list of such benefits, but rather should identify those that most closely address the organization’s vision and business objectives.   
  • Also know that, in other cases, tangible benefits cannot be estimated. If these are key to building the Business Case for the project, get the sponsor involved in helping the team to decide what benefits to investigate. The sponsor can frequently make assumptions about     customer retention rates and revenue increases that the team is uncomfortable making. This is an excellent reason to keep the sponsor involved in the design effort on an ongoing basis.

Tactics/Helpful Hints

  • It is premature to expect a degree of accuracy in the costs and benefits of the program more precise than +/-30%. In the interest of moving quickly but prudently, the activities in the Design High Level phase are designed to develop a good understanding of what could be, about what it will take and how much it will produce. This level of detail can only provide a reasonable     degree of accuracy which is quantified at +/- 30%.        
  • The Business Case is not the final financial analysis of a project, the client has another ‘go-no-go’ decision to make at the end of Design Details Phase. The Business Case provides enough financial analysis (with an accuracy of +/-30%) to determine overall feasibility of the new design and enable a decision to pursue a project or program into the next Phase.   
  • Outside research may be necessary for completing this activity. For example, current market share and overall market growth are needed as a basis for estimating growth in share and resulting revenues. Internal studies may already exist about the potential benefits of sales growth, or the impact of cer­tain types of cost reduction.
  • At times, the Client team will not be willing to devote the time to collect additional benefit data that External Consultant feels is necessary. At this point, the sponsor will be brought in to work with the team to decide what level of benefits are needed to ‘sell’ the new designs.   
  • In some cases, costs cannot be estimated precisely. For example, information technology managers will resist estimating costs of system changes based on high level process design documents. The sponsor will need to reassure individuals that they will not be criti­cized if the assumptions and estimates change in the future.   
  • The team should present the cost/benefit information in the format that the organization typically uses according to the framework identified, such as a profit and loss impact statement, or a graphical representation of cumula­tive costs and benefits. Practices for calculating various inflation rates should be agreed to ahead of time. Inflation or growth factors can impact payroll costs, benefits, materials and product/service prices.    
  • It is appropriate to find out the organization’s traditional ‘hurdle rate’ and pay back period. If this project cannot meet those standards the team and sponsor must work together and with the relevant executives to package the Program in a way that will still be eco­nomically defensible.
  • If multiple scenarios are under consideration, benefits should be calculated for each scenario hand in hand with the Migration Plan. All potential benefits should be discussed with the project sponsor, and with other executives. They can provide guidance as to what will be seen as realistic or valuable to the organization. The tangible dollar benefits will be key, though some organi­zations place great weight on non-financial and intangible benefits as well.
  • The Business Case is used as a lever to continue the momentum of the program and inspire still greater amounts of employees. The messenger’s status and behaviour is key.


  • At least one, dedicated, full time consultant is required to maintain the drive, direction, continuity and expertise. Usually to be paired with a full time client resource, together to manage the construction of the Business Case. Additional client and consultant resources are used according to the business case plan developed by the dedicated client and consultant.
  • The consultant must be the driving force and knowledgeable party on the Business Case. However, the client and sponsors will ultimately own the business case process and must agree with the results and methods to achieve the results.   
  • Extended teams of client personnel are used to develop detailed costs and benefits in the following areas:
  • IS/MIS Department will assist in estimating hardware, software develop­ment, and support costs
  • HR department will provide data on training devel­opment and delivery costs, both from inside providers and contractors. In addition, HR involve­ment is crucial to assessing the financial impact of job changes, recruit­ing, hiring, layoffs, etc.
  • Other departments, such as sales, marketing, product development, purchasing, maintenance, quality assur­ance and various operational units will also provide needed information.

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