Getting What You Want: How to build an effective business case

Getting What You Want
Building a Successful Business Case
Bonni Graham Gonzalez

Who Am I?
Bonni Graham Gonzalez
• Senior Manager, Marketing Communications at Scantron
Corporation
• Former Owner/CEO of documentation services company
• Associate Fellow, Society for Technical Communication
• Instructor at UCSD Extension and UCR
5/30/2013 Copyright © 1999-2013 Bonni Graham Gonzalez
All rights reserved.
2

3
Basic Business Concepts
• The goal of a company is to make a profit.
– If the company doesn’t make a
profit, you don’t get paid
• Buy low, sell high isn't just a stock tip
• Gross Profit: What’s left over after you pay
all the bills that are directly connected to
producing your product
• Net Profit: What’s left over after you pay
everything else
Money comes in
as Revenue
Some money goes out as
Cost of Good Sold (COGS):
• raw materials costs
• direct, loaded labor costs
• shipping costs
What's left now is called
Gross Profit
Other money goes out as
General and Administrative Costs (G&A):
• facilities costs
• non-direct, loaded labour costs
• insurance
• sales costs
What's left over is called
Net Profit

4
What is a Business Case?
• A business case with reasonable figures is the
mechanism to demonstrate the worth of a
proposal:
– Persuasive essay
– Asserts a single proposal
– Proves that point with good argument, facts, and
figures
– Does not simply include hearsay and wishful thinking

5
What are the Elements of a
Business Case?
• Executive Summary
• Current Situation
• Proposal
• Financial Proof (ROI or CA)
• Conclusion
• Supporting Material

Return on Investment vs
Cost Avoidance
• Return on Investment
(ROI)
– “Spend money to make
money”
– Asking for “new dollars”
– Must show how long before
new income or cost savings
will recoup new dollars
spent
• Cost Avoidance (CA)
– “Make the most of what
you’re already spending”
– Asking to redirect dollars
already being spent
– Must show whether dollars
will actually be redirected
(i.e., not spent on their
original allocation)
5/30/2013 Copyright Manual Labour Inc. 2003-2007
6

7
Business Case Elements:
Financial Proof
• Demonstrates the ROI or CA of the proposal:
– Compares the current costs to the proposed costs
– Details the savings or period to ROI
• Uses actual company or industry standard
numbers
• Can summarize financials if you provide full
versions in Supporting Material section

Sample Financials
Manuals vs Tech Support
8
Tech Support Good Documentation
# Calls per area (average)
per month 200 # Lookups per area 200
Length of Call (minutes) 5
Reading time per page
(minutes) 15
Cost per minute 19.50$ Cost per minute n/a
Cost per call 97.50$ Approximate cost per page 231.10$
Cost per month 19,500.00$ Approximate pages per area 75
Tech Support Burden per
area per year 234,000.00$
Documentation Burden per
area 17,332.50$
7%percentage reduction in support costs to justify document development costs

Sample Financials
New Tools
# Writers 4 # Writers 4
Labor cost per writer-hour 25$ Labor cost per writer-hour 25$
1 Supervisor: ~$29 1 Supervisor: ~$29
2 Mid-Level: ~$26 2 Mid-Level: ~$26
1 Entry: ~$20 1 Entry: ~$20
Overhead cost per writer-hour 6$ Overhead cost per writer-hour 6$
Benefits Benefits
Facilities Support Facilities Support
Total cost per writer hour 32$ Total cost per writer hour 32$
Cost to purchase application -$ Cost to purchase application 3,196$
Cost to train -$ Cost to train 1,263$
10 additional hours/writer on
# writer-hours/week spent re-doing work 16 the first project
Cost of lost work/week 505$ Total cost of proposal 4,459$
9
Comparison of Costs Between Using MS Word and Buying and Using FrameMaker
Word FrameMaker
# weeks before regained productivity recoups cost of proposed expense
9

Sample Financials
Better Internal P&P Guides
10
Average Supervisor Cost/hour 32.50$ Contract Writer Cost/Hour 50.00$
Average Employee Cost/hour 16.90$
Total Cost/Training hour 49.40$
Average Time (hours) per procedure to train 3 Average Time (hours) per procedure to write 8
Number of Procedures 10 Number of Procedures 10
Total Time to Train (hours) 30 Total Time to Write (hours) 80
Total Cost Per Training 1,482.00$
Est. # Trainings/year 15
Total Training Cost/year 22,230.00$ Total documentation cost 4,000.00$
Average # Mistakes/year/Procedure 100
Potential Annual Cost of Mistakes/Procedure 10,490.00$
rework
fines
Potential Annual Cost of Mistakes 104,900.00$
Comparison of Costs of Word of Mouth Training vs Documented Policies and Procedures
Accounting Department
Word of Mouth Training Documented Policies and Procedures

Audience Terminology
C-Level
• Needs:
– Strong financials and
market offering
– Effective
short, medium, and long-
term plan
• Keywords
– Shareholder value
– Business case
Finance
• Needs:
– Cost/revenue justification
– Concrete numbers based
on facts
• Keywords
– ROI
– Cost Avoidance
– Cost of Goods
– G&A
– Book of business
11

Recommended Reading
• What Your CEO Wants You to Know, Ram Charon
• Crossing the Chasm & Inside the
Tornado, Geoffrey Moore
• The Goal, Eliyahu Goldratt
• Business @ the Speed of Stupid, Dan Burke
Further questions: bgraham@manuallabour.com
12

Getting What You Want: How to build an effective business case

Recommandé

Recommandé

Contenu connexe

En vedette

En vedette (17)

Similaire à Getting What You Want: How to build an effective business case

Similaire à Getting What You Want: How to build an effective business case (20)

Dernier

Dernier (20)

Getting What You Want: How to build an effective business case