Business transformation initiatives don’t give an organization carte blanche on spend. These projects must be rooted in solid financial stewardship, with a holistic understanding of the associated costs for changes related to people, process, and technology. The transformation efforts also need clearly articulated business outcomes to understand and evaluate the total economic benefits of various scenarios.
As part of our business transformation projects, we provide an analysis of business objectives, estimated costs, and sensitivities for a complete executive evaluation of improvement programs. We blend numerical and strategic benefits to emphasize the most critical factors for success. Our business case development spans across the three levers:
- People: staffing, organization, measures, training, etc.
- Process: process improvement, business practice changes, business model, etc.
- Technology: system architecture, services, integrations, etc.
We develop a financial model that covers anticipated timing of these components of cost, whether the costs will affect the P&L, and how much of the anticipated costs can be capitalized. We also model the future benefits of the project, when the benefits will occur, and the financial impact. Metrics such as ROI, IRR, and Payback Period are then created to ensure that the overall spend on the transformation program stays in check and is managed appropriately in conjunction with competing uses for capital.
Along with developing a business case for a transformation initiative, we often prepare a business case of simply doing nothing. In many cases, the cost of doing nothing becomes a strategic rallying point that both justifies the spend and serves as a critical component for change management over the course of the initiative.
Do you need assistance creating a business case for your business transformation initiative? Contact Us today.