Inclusion Social

cover

How to Build a

Business Case
WIN MANAGEMENT
APPROVAL FOR YOUR
NEXT PURCHASE
REQUEST

BY JACK MOLISANI, Associate Fellow, AND BONNI GRAHAM, Senior Member

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Kutay Tanir/Getty Images

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I

f you’ve ever had a purchase request denied, it may have lacked
one or more key elements that
management evaluates when
allocating corporate funds. In
this article, wewill address how to build
a business case for spending your company’s money, whether you want to buy
something big, something small, or to
justify a better raise come annual review
time.
Corporations and municipalities can
spend years building business cases for
major construction projects, and universities dedicate whole classes to the subject in their MBA programs. Our intent
is not togive an exhaustive treatise on
how to build a business case, but to offer information that may increase your
chance of getting your next purchase
request approved.
The Basics

As owners of technical writing companies, we have observed that many of our
employees over the years didn’t appreciate how they affected (positively or negatively) the company’s cash flow. Later,
when we startedfacilitating workshops
on how to build business cases, we discovered the problem also existed with
corporate employees—especially those
in large organizations where what they
did (technical writing) was not closely
associated with any particular product
the company sold. The problem was
even worse with government employees,
as none of their organizations offered a
product or service that wassold to customers—money just magically appeared
in the budget thanks to the kindness
and generosity of taxpayers.
The key concepts for building a business case are direct versus indirect costs and
profit versus cost centers. For readers who
have little experience with the bottomline language of business, the sidebars
on pages six and seven contain introductions to these concepts.
While manydepartments are clearly
cost centers or profit centers, some
gray areas exist. These areas can be cost
July/August 2008

Management is
concerned with
decreasing costs

and increasing
revenue, so state
the problem in
those terms.

centers or profit centers, depending on
how much revenue they generate or
(unfortunately) how management perceives them.
For example, some companiescharge
customers for tech support. If the total
revenue generated from these charges
covers the costs of the support team and
infrastructure, tech support is a profit
center. If it doesn’t, tech support is a
cost center.
Technical documentation is also a
gray area. If a company considers documentation an integral part of the development team (and therefore a profit
center), the departmentwill be well
staffed and well funded. But many companies liken documentation to boxes
and bubble wrap—commodities to be
acquired at the lowest acceptable quality for the lowest possible price (that is,
cost centers).
Profit centers have an easier time
getting purchases approved than cost
centers. The issue of how management
views technical communication and how
to change that perception,although beyond the scope of this article, is at the
very core of the drive to advance our
profession. For suggestions on how to
improve management’s view of technical communication, see Jack Molisani’s
articles “Advance Your Career Using
Public Relations” (Intercom, July/August
1999) and “Expanding Your Sphere
of Influence” (Intercom, June 2005), or
Bonni Graham’s presentation “Proving
OurWorth” at www.manuallabour.com/
symposia.htm.


Types of Expenditures
Technical communicators looking to
have a purchase request approved need
to understand the reasons why companies spend money. Generally, company
expenses are intended either to save
money or to make money.
Spending money to save money is also
known as cost avoidance (CA). Replacing
incandescent light bulbs with...