Digital transformation is giving forward-looking businesses a competitive advantage, and getting technology projects approved hinges on the strength of your business case. What criteria will make stakeholders more likely to green-light your project?
Most business cases present cost savings to support a project. While this isn’t a bad thing — reducing costs is a significant part of operational excellence — you can create a compelling case by digging into two often overlooked areas: revenue generation and strategic value.
Want a business case that will win over your stakeholders? Try to include at least two of these three elements.
Saving on costs is a natural go-to for building business cases: Stakeholders trust quantifiable values that could immediately affect your bottom line. Demonstrating cost saving essentially looks at how much it costs to do something, how much it would cost to do it differently, and what the savings would be if you made the change.
Determining cost savings is a fairly straightforward process — it just takes patience (and a spreadsheet or two) to identify and assess specific areas of potential savings. Some basic questions to ask include:
These questions just scratch the surface of finding efficiencies. Try analyzing one cost center at a time, digging into the layers of costs contained in that center and branching out from there.
Once you’ve broken out your cost centers, calculate your return on investment. Business stakeholders are especially looking for substantial ROI, which you can calculate using this simple equation:
(Gain from Investment - Cost of Investment) / Cost of Investment (x100%)
Cost-saving is a valuable tactic in improving your business processes, but it isn’t a strategy for growth. A new initiative is even more valuable if you can prove that it produces more revenue.
Look beyond creating efficiencies for cost savings by focusing on outcomes rather than processes. Here are some questions to get you started.
Focusing on revenue generation can also lead to shifts in organizational thought. How might thinking in terms of products, rather than projects, affect decision making and budget planning? Will you start allocating funds to digital products that deliver business outcomes and improve the customer experience?
As you start asking these questions, you’ll begin to see how your project can also bring strategic value to your organization.
Not all benefits outlined in a business case need to be quantifiable. Strategic value is a “soft” benefit that can have a sizable impact on your organization’s competitive advantage.
Connect the dots between your project and specific business objectives to make your business case even stronger. Areas of strategic value include:
These are just a few ways you can determine the strategic value of digital transformation for your business case.
Feeling stuck? JourneyApps can help. We’ve worked with many customers to explore the different ways digital transformation can give their organizations a competitive advantage.
Contact us if you’re interested in getting business case pointers from experts.