Investment Decisions
Most important business decisions are investment
decisions in one way or another.
When a proposal asks for funds, labor, or other resources, everyone wants to know how the expected returns compare to the costs. Decisions to develop a new product, launch a marketing program, or purchase service equipment, for instance, all require “ROI” thinking.
Making the best decision calls for a case that captures all the costs and all the business benefits, including those that are hard to measure in financial terms. The case also has to be understood and believed by stakeholders and decision makers or it is a non-starter:
- Do the results really support the analyst's conclusions and recommendations?
- Does the case compare different alternatives fairly?
- What are the risks in taking the proposed action?
For an overview of the business case that lets you answer these questions with confidence, please see the whitepaper "Business Case Essentials" or the Business Case Guide.
The Business Case Solution for Business Investment
Solution Matrix Ltd. can help you build the business case for your specific investment, in the shortest possible time. You can take advantage of the proven 8-step Business Case Solution in several ways:
- Our consultants lead your case-building project team, onsite, as project managers and coaches.
- We design and build the case onsite, drawing on information that you and your people provide.
- We train your case-building team and other professionals to implement the Business Case Solution, using your immediate case-building need as the focus of teaching examples
Regardless of approach, your completed investment case includes the design elements that help establish credibility and practical value for all who use it:
For more information about the Business Case Solution for Business Investment Decisions, or to request a formal proposal, please contact Solution Matrix Ltd.
The Business Case Solution for
Investment Decisions Includes:
- Complete case building project management.
- Case-building project planning and industry analysis
- Selection of the case-building team (ideally representing all major organizations and functions impacted by the investment decision).
- Recruitment and management of a Business Case Advisory Group.
- An easily understood, comprehensive cost model, to show clearly which cost items were included, which were not, and why. The cost model also establishes clearly that alternative scenarios were compared fairly.
- A comprehensive cost analysis, showing projected investment costs under "Business as Usual" and "Proposed Investment" scenarios, across the life of the investment. The cost model and analysis are implemented and delivered in MS Excel format, for continuing investment management and control.
- A solid and complete benefits rationale, validated with your stakeholders and management. The benefits rationale is the logic that legitimizes benefits for your case, provides the basis for assigning value to benefits, and shows how the investment contributes to business objectives.
- Complete cash flow statement projections showing expected cash inflows and outflows from cost benefit analysis of investment and business as usual scenarios.
- Financial metrics (measures) to meet the purpose of the investment case, including return on investment (ROI), net present value, payback analysis, and other summary analyses of your projections.
- Rigorous risk and sensitivity analysis of the financial models and cash projections, including:
- Confidence interval estimates for net cash flow and other financial metrics.
- Important contingencies that must be managed to target levels by management and stakeholders (critical success factors).
- Major risk factors and their probabilities.
- Recommendations and conclusions based on projected results, risk, and sensitivity analysis, that explain clearly what has to be managed (the important critical success factors and contingencies), what has to be watched carefully (the important risks), and practical steps for maximizing return on the investment.
- A comprehensive business case report, summarizing and interpreting the above analyses. The business case report is delivered in MS Word and MS Excel files, for ongoing updating and continuing IT management and control.
- An business case presentation, designed for board-level or senior management review. The presentaiton is delivered as an MS PowerPoint presentation file.
Typical calender time:
1 week planning and background reserach
1 week onsite interviews, including 2-day collaborative workshop with key individuals from host company or organization
1 week follow up research, analysis, and final presentation
Total: 3 weeks
Project leaders:
Two senior solution Matrix Ltd. consultants with 20+ years
combined business planning and business case experience For more information about the Business Case Solution for Business Investments, or to request a formal proposal, please contact Solution Matrix Ltd. |
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