Five Elements To Include In Acompelling Business Case

Five Elements to Include in a Compelling Business Case Taking your business case from "good to great." Friday, January 11, 2008 By Ruben Melendez, CEO & Executive Analyst, Glomark-Governan JimCollins' book Good to Great teaches how companies can transition from the ranks of a good business to the heralded status of a great company. If we ask a CEO what differentiates the two, the most likelyanswer will be "great shareholders' return." If we search for the company from Industry Week's 50 Best Manufacturing Companies with the highest profit margin, we will find Southern Copper Corp. (SCC),leading the list with an impressive 37.3% profit margin. Interestingly, most of the content found in the SCC Chairman's letter to shareholders in their 2006 Annual Report discusses SCC projects, such asmodernization of the copper smelter in Ilo, engineering development, construction of a new molybdenum plant, expanding capacity, new equipment installation, etc. But how do managers and executives incompanies with great returns, such as SCC, choose great projects? With Great Business Cases that contain objective, compelling and effective information which allows senior managers to choose theprojects with the best financial returns for their corporations. IT now has to compete with everything else on the wish list, and while there are many factors that contribute to the validity andacceptance of a Great Business Case, there are a few key elements that will speak directly to C-level decision makers. 1. A Scenario Analysis When working to build a Great Business Case (i.e. one that isobjective and compelling), research must be conducted and reasonable, educated assumptions must be defined in order to clearly present the anticipated project benefits. While some factual, real data maybe known, (e.g., number of employees) allowances must be made for potential variation or uncertainty. This awareness of not only the "most likely" results, but also the "best-case" and "worst-case"...