When ‘Trust Me, It’s a Good Idea’ Won’t Cut It
Tips for Developing Effective Business Cases
by Ulla de Stricker
President, de Stricker Associates
Of all the challenges we information professionals tackle, I believe the one we dread the most is crafting business cases — to advocate for budget increases, for new licenses, for special projects, or even for the continuation of our own jobs. We are forever dogged by the pervasive difficulty of “proving” the value of existing information services or how worthwhile it is to invest in expanded services or new tools. Something must be done. Far be it from me to claim I have come up with a magical solution, but I have made the effort to develop guidance for all those who need to formulate their arguments as to why, indeed, “the money would be well spent.”
Getting Decision Makers to Approve Proposals
Say we want to introduce a new commercial service or tool. Say we want to add positions in the information center. Say we want to expand on the services we offer and become knowledge management consultants within the organization.
No matter what our ambition, it may fail to engage decision makers because our proposal lacks the information and knowledge management equivalent of sex appeal.
Lack of sex appeal, part one: Would that we all had zinger $$$$ stories to tell. Unfortunately, articles with headlines reading “Work by $XX/yr Information Professional Leads to $200 Million in Profits” rarely appear in trade press magazines — or even TheWall Street Journal. A colleague told me a story that illustrates this point:
At a scientific laboratory, a multimillion-dollar project to address a specific challenge was planned. The information officer noticed a Russian article looking relevant. Modest translation costs later, the project was deemed unnecessary: The article contained the solution to the challenge. The information officer’s salary paid off in orders of magnitude.
Lack of sex appeal, part two: There’s a more fundamental problem. For those outside our profession, information services or products are yawn-inducing, dull topics.
Is There Hope?
But let’s not despair. There are ways to improve the chances our business cases will stand up to executive scrutiny.
Making a business case is, in fact, an innate human skill. We use it often — for example when we buy those impractical but must-have shoes or an expensive gift for a loved one. There is a logical progression in taking someone (ourselves or others) from a base position — the current situation — all the way to agreeing to a proposed approach. The progression involves direct benefits statements and inverse downside statements. It anticipates objections and deals with them upfront. Teenagers do it instinctively. (See the “Honest, Mom, Honest …” sidebar on page 32.)
“HONEST, MOM, HONEST…”
Let’s listen to high schoolers present the case to their parents explaining why they need approval and funds to go backpacking, “starting in Thailand where Barbara’s cousin lives,” for 8 months before they enter university. The soon-to-be-grads have an innate sense of how a business proposal goes:
BACKGROUND: You always stressed how important it is for us to see the world and gain insight into other cultures and societies. We’re not sure what to choose for a major and we need some time to find ourselves … besides, we’re burned out so going to college right away might just waste the tuition … we could end up dropping out and living at home.
PROPOSAL: We want to defer our freshman year at ABC University and join with Barbara and Rafi on their second trek to the Far East. They figure it will cost about $X all told for air fare to Thailand and back, local transportation, food, and accommodation for the eight months. If we work as scuba diving instructors along the way, like Catherine did last year, we can reduce that amount a lot or make our money go a lot further.
RISKS OF BUSINESS AS USUAL: If we don’t go, we’ll miss out on a huge opportunity to expand our horizon. We may never have this opportunity again to travel with experienced backpackers. Besides, it’s generally not advised these days to go straight from high school into freshman year.
DOWNSIDES OF SOME OBVIOUS ALTERNATIVES: Sure, we considered the Europe trip, but we feel we won’t learn as much and the cost would be five times higher!
BENEFITS OF THE PROPOSAL: We’ll have a chance to get some perspective and gain some maturity so that, when we do start freshman year, we’ll really be able to get into studying.
ANCILLARY BENEFITS: In this global economy, it’s important to have contacts all over the world. Also, international travel is a plus when it comes to getting into graduate school and getting jobs.
REASONABLE INVESTMENT: We’ve already saved some money from our summer jobs and we’re selling our cars. So all we’re asking for is $Y. That’s cheaper than feeding us at home!
RISK MITIGATION: We already thought of that. We’ll carry GPS phones and since we’ll be four traveling together, it’s unlikely we’ll be at risk. We promise to call home twice a week and stick to well-traveled routes.
(The part about how many times they’ll mow the lawn won’t apply here as we can’t “sweeten the deal” for our managers the way teens like to do for their parents.)
– Excerpted from the forthcoming Information Today, Inc. book, Business Cases for Info Pros: Here’s Why, Here’s How [June 2008, ISBN: 978-57387-335-2; $39.50]
Speaking of Shoes …
Before crafting any kind of business case document — whether a brief memo, a presentation, or a full-fledged document —we must first put ourselves in the shoes of the decision-making readers “up the line.” What are their concerns? What are their personal and business goals for the time they expect to remain in their current positions? What types of risks have their attention and what types of risks leave them unmoved? How do they view the “information landscape” in the organization? Who else is competing with us for their funds? In a previous article (“Hunches and Lunches,” Searcher, April 2004), I commented on the many reasons why executives may be un-inclined to pay the information services in their organizations much attention. Those reasons are relevant because we need to address them appropriately in our business cases.
It is a business reality that those who sign the checks need solid reasons why they should support proposals. The last thing they need is to end up in an untoward position as a result of championing our case; we must not expose them to the risk of looking unprepared when they, in turn, are challenged by peers as to the merits of the case. Said another way: Our business case must equip our managers to look prudent, savvy, and smart as they espouse the specifics of what we propose.
Decisions, Decisions …
Another business reality demands that decisions are not made “just because.” They are made to address a problem, take advantage of an opportunity, increase profits, avoid litigation, or in many other ways meet strategic goals. In other words, the proposals we make must align with other decisions being made, and we must shape the pitch accordingly. In addition, we must demonstrate an understanding of the decision-making environment — budget cuts, competitive pressures, and the like — to avert any possibility that the reaction could be, “Yes, your ideas are good, but in the current climate it’s not feasible to implement them.”
One practical way to address alignment with the current decision-making environment is to conduct a brainstorming exercise: How will our ideas look given the current realities? How will our ideas mesh with decision makers’ intrinsic and extrinsic motivations? What credible links can we make between our proposal and some tangible desired organizational outcome? Is the timing right?
Elements in a Business Case
Whether staving off an undesirable development or charting bold new territory, the building blocks in a business case remain the same as shown in Table 1, Building Blocks for Success, on page 34.
How Large a Document? Make Scope Fit the Culture
Corporate culture dictates the level of detail in a business case document. In some environments, anything beyond seven slides will not be read; other cultures demand more text. A Canadian public sector organization developed one practical approach referred to as “3-8-25.” The approach entails three pages of bullets for the high-level reader, approximately eight pages of brief text for those wanting a bit more background, and approximately 25 pages of fuller text for those interested in the details. Use an appendix for literature references and any other supportive material.
Facts as Building Blocks: An Illustration
Our business case must stand up to the factual test: Is the proposal based on documented problems, needs, or opportunities — as opposed to just our opinion? Even more challenging, it must be able to withstand and disprove any potential worry about any self-serving biases. Ergo, it needs facts, findings, and measures. While we may know that “the knowledge workers are spending considerable time doing their own searching — and missing key information in the process” — such a statement has the air of subjective opinion. “Seventy percent of those knowledge workers responding to the question indicated they spend at least 12 hours a month looking for literature and, of those, over half expressed a concern that they are not finding all the relevant information but have no further time to keep looking” constitutes a stronger way to state the problem, because it leaves us out of the picture.
Facts in Hand: Proceed to Write the Business Case
It is possible that we already possess the ammunition we need. As an example, our activity statistics may indicate clear trends that demand attention and action: A 65% increase year over year in the number of requests for information assistance leaves staff not only strained and stressed but also unable to perform to the level of quality desired. The merger has presented the need to develop a completely overhauled intranet and the necessary human resources are not available. A new commercial product has come on the market and 95% of knowledge workers have indicated they absolutely must have access to it. (And so on.)
Facts Not in Hand: Do the Research First
It is wise to invest time upfront to discover the facts we need — even if the effort only confirms what we already suspected. In effect, we need to conduct a mini-audit to establish the measures we wish to portray in the “background” block. Using the knowledge worker self-searching example, suppose we want to propose an enhanced research service geared specifically to intensive support of project teams, requiring an additional position in the information center. We would need to measure the following:
How often do the knowledge workers do their own searches when they need information — 0%, 25%, 50%, 75%, or 100% of the time?
How long does it take them to search for themselves?
What is the organizational cost of that time?
How satisfied are they with their results?
Are there situations when project work has suffered, been delayed, or been redone as a result of the fact that self-searching produced incomplete information? What is the knowledge workers’ estimate of the amount of extra time required for project work in these situations?
Such measures put us in a position to quantify advantage to investing in a new position for an information professional against the organizational gain from a reduction in knowledge worker search time and an increase in productivity and quality of decision making.
Granted, we cannot claim that the investment of one position in the information center will enable us to deliver six- or seven-figure return-on-investment cash to the CEO at the end of the first year, but the calculation illustrates that we have measured the current “cost of not investing” as well as the potential impact of investing. Naturally, we introduce any such calculation in our document with disclaimer language (“The following is intended as an illustration of the kind of impact the current situation is having”) so as to ward off objections to hypothetical numbers.
The bottom line is that without facts and numbers, our business case would be vulnerable to the competition from other cases that feature them. Decision makers prefer to hang their judgments on something real.
Before sending any business document off to decision makers, I recommend we “step away” and put it to a few tests. First, have colleagues study it and test it for credibility: Are the facts sufficient? Is there jargon? Could arcane detail unique to our profession be expressed so the readers will understand? Are the proffered benefits realistic? Are there weak points? And so on. Second, test the document for potential reader reactions that could be addressed upfront. Could the reader ask, “Will this proposal really help us attain corporate goals?” Might the reader think, “Will I endanger my corporate stature if I espouse this proposal?” Would the reader worry “How will I be able to prove we got our money’s worth?”
For those lucky enough to have mentor-type bosses, you may even try to engage them in the final process of polishing the document for its further voyage (assuming it is going to be presented at higher levels).
With practice, the task of writing a business case becomes less daunting. Consider every opportunity to prepare one as a chance to grow professionally; the skill of getting others on board with a new idea is valuable in every work situation.
“How Many Knowledge Workers Does It Take To …?”
Let’s assume that in a body of 100 knowledge worker, each worker estimates needing new literature on average 10 times per year
• 80% say they spend 12 hours per month searching for literature and dealing with alerts.
• 40% (half of the 80) in addition feel they do not succeed in getting the “right” information and estimate that, in 5% of their searches, the missing information entails additional or repeated project work of 4 days.
Such measures generate a piece of math looking something like this:
• 11 months x 12 hours x 80 workers = 10,560 searching hours @ $75/hr = $792,000 cost of searching time (that could be put to more targeted/analytical use by the knowledge workers)
• 11 months x 10 searches x 80 workers = 8,800 searches, of which half the workers (4,400) estimate that 15% (660) searches generate 4 extra work days = 2,640 extra work days = $1,548,000 cost of the extra work (that could at least to some extent be avoided if a professional performed the searching)
Against such numbers, a single salary looks very reasonable.
|BUILDING BLOCKS FOR SUCCESS
1. Exec Summary
Note: Here, the proposal is given first because executives tend to ask “What are you asking me to approve? For how much?”
|1-3 pages outlining:
• Precise action proposed and the investment
• Drivers — why the action is needed or opportune
• Effort and investment: $, time, people
• Strategic alignment
• Readiness to proceed
|| “This is why you want to care.”
• The problem, need, or opportunity (PNO)
• Evidence and metrics (e.g., X% of stakeholders are asking for this)
• Origins of the PNO
• Risks of status quo
• Why any previous action failed
“I have done the homework.”
• Outline of range of options and the likely results of each
• Reasons why some are not viable
• Details about the viable ones
|4. Environmental Analysis
“You are not alone and you are not a guinea pig.”
• Who else in the organization experienced a similar PNO and what was done, with what results?
• What have other organizations done about the PNO? With what outcomes? (such information may only be available from published sources)
• Lessons learned
“What I specifically propose to do.”
• Scope of actions
• Critical success factors
• Implementation steps
• Means of determining success
|6. Budget and Cost
“Here is what I’m asking you to invest.”
• Direct and indirect costs
• Implications for current and future years’ budgets
“Here is what you will get.”
• Inverse or mirrors of the PNO
• Time savings, risk reduction, cost cutting, apply staff to more productive work, etc.
• Estimated ROI (knowledge workers to save X hours of wasted time = $Y salary put to better use)
• Soft benefits (enhanced competitiveness, more timely decisions)
|8. Strategic Alignment
||“The proposal is in sync with overall organizational strategy.”
• How the proposal supports key goals
• Risk mitigation: How the proposal deals with X, Y, Z potential risk
|9. Readiness to Proceed
“I can move ahead if you approve.”
• What we already have to enable moving ahead
• What we need over and above funding (e.g., support from IT)
• Any risks if not moving ahead now
“There is published support for my proposal.”
• Studies, articles, statistics
• References to presentations at conferences
• Any other documentation to support the body of the document
Ulla de Stricker is a knowledge and information management consultant helping her clients address a wide range of challenges [http://www.destricker.com]. Her book, Business Cases for Info Pros: Here’s Why, Here’s How, will be published by Information Today, Inc. in June 2008.