What Every Business Case for Digital Transformation Should Include

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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.

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When you’re writing a business case, ask yourself these three questions:

  1. How will this project reduce costs?
  2. Can this project directly or indirectly generate more revenue?
  3. What strategic value does this project unlock?

Business Case Checklist

Want a business case that will win over your stakeholders? Try to include at least two of these three elements.

  • Saves costs
  • Generates revenue
  • Creates strategic value

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1. Cost Saving: Look at the Bottom Line

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:

  • What cost centers are involved or affected?
  • Are these costs one-time or recurring?
  • How long will it take to realize the savings?
  • What are your savings over time?
  • Can you find savings through cost avoidance, i.e. avoiding future costs?

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%)

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2. Revenue Generation: Add Value to Your Top Line

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.

  • Which existing revenue streams can be expanded by this project, rather than just lowering expenses?
  • Will this new technology free up resources that can be redirected to revenue-generating activity?
  • Which new revenue streams can this project unlock?

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.

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3. Creating Strategic Value: Align Your Project with Business Objectives

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:

Room for innovation

  • Will changing processes through digital transformation change a way of thinking in the organization that encourages new thought patterns? Can it potentially open up new dialogues, or free up teams to find creative solutions?

Customer experience

  • How will the efficiencies created by digital transformation help you provide a superior customer experience? What can improvements like rapid data-sharing or faster response times do for customer satisfaction?

Empowering IT

  • In what ways can digital transformation position your IT group for success? For example, will working with a technology partner for systems of innovation allow IT to focus on maintaining systems of record, rather than working on single, short-term projects?

Operational Agility

  • Does this project give you greater capacity for continual improvement? Will you be able to scale projects with smaller upfront investment?

Better insights from data

  • Will your new solution provide you with significantly better data about your operational processes or products, that will allow you to improve your product quality or reliability?

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Get Help Building A Strong Business Case for Digital Transformation

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.


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