Bu­si­ness ca­ses

Challenges

Business cases are a decision-making tool for projects and undertakings of a unique nature and with substantial impact. Such projects may include acquisitions, divestments, market entries, outsourcing, restructuring or the relocation or closing of sites.

Scarce resources – especially capital – mean that decision alternatives have to be commercially assessed, selected and prioritised using a comprehensive simulation model. The challenge is to concentrate these scare resources on projects offering a return greater than the cost of capital. Key performance indicators such as return on investment, return on (average) capital employed or net present value therefore form a critical part of business cases. Business cases are different from other decision-making projects and tools because they are based on a distinctive quantitative core model. But business cases also take into account non-financial and qualitative information because making decisions in the business environment is complex and variable, and such information is needed to assess and weigh all impacts in a balanced fashion.

A general approach to business cases can be summarised as follows.

  • After defining the decision problem and the goals the business case is developed.
  • It is followed by a quantitative and qualitative assessment of the problem, followed by a justification and a recommended solution.
  • Finally, tracking key performance indicators and targets is of elementary importance and should be integrated into the management cycle.

Key questions

Core questions that need to be addressed when designing a business case include:

  • Scope and objective: what are the core goals and how are they operationalised in the form of key performance indicators? What is included in the scope of the calculations, what is intentionally left out?
  • Roles: who commissions the business case? Who is the expert responsible for data gathering, modelling the case and analysing and presenting the results? Who is the specialist who can supply data and challenge the model's assumptions? Is the person commissioning also the decision maker? Who will be the beneficiary (or affected party) of the business case?
  • Scenarios and risks: which scenarios are relevant? How many recommended actions will be formulated for various scenarios? Which risks must be taken into account?
  • Analysing and showing the results: how can the complex interplay of factors be presented in a way that makes sense for the target group and enables its members to arrive at a sound decision?
  • Financial integration and change management: how can the tracking of the business case be sensibly integrated into the control processes of financial management (reporting, planning, budgeting etc.)? Which change management activities will be employed to support implementation of the business plan?

Our offering

Using an approach tried and tested in practice, CTcon supports clients in their decision-making processes for projects and undertakings of a unique nature and with substantial impact. We work closely with our clients and accompany them throughout the process of integrative and sustainable implementation. Our work is based on broad experience in quantitative decision-support modelling, gained on numerous projects with clients from diverse industries.

Your contact person

Axel Neumann-Giesen
Partner | Bonn | Germany
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