Category Management:  Why a “Business Case” is Critical

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There are some irrefutable observations that we are able to make after decades of launching, studying, fixing many initiatives – be they sourcing events, Transformations, major ERP implementations etc. etc.  And we have shared many of them along the way (Strategic Competencies, Change Management, Adoption etc. etc.)  One that we have not touched on is the need for an effective Business Case and managing the initiative to that Business Case.  You have probably seen a version of this slide before:

The message in the tombstone is one that we now tell all our clients.  If you are looking for the reason why your initiative is failing or not going as well as expected, it can usually be diagnosed by looking at the elements of Rapid Launch and Adoption above.  It’s typically because those elements are not there or were not done effectively.

One of those critical elements is the “Business Case” and there are two critical phases you should be aware of.  The development of the Business Case is critical in that HOW you develop it is as critical as WHAT is in it.  Getting your Stakeholders involved in defining AND validating their Value Drivers is one of the most critical steps you can take.  The second critical phase is what we call managing the initiative to the Business Case.  Very often the Business Case is used as the vehicle for approval and funding and that’s it.  In fact, it needs to be a living breathing document that is actively used by the sponsors to hold initiatives accountable for benefit realization.  And when we say hold initiatives accountable, that includes not just the project teams but also the Stakeholders.  We often see Stakeholders sign off on their Value Drivers but then not be held accountable for their role in Adoption and Benefit Realization.

Here is a list that we often use as the Top Ten signs the Business Case is in trouble:

  1. There isn’t one.  Or there are only two people who understand it
  2. We only care about the business case when we need more money
  3. Processes and organization are designed without focus on benefits
  4. Task completion (versus benefits realization) is the measure of success
  5. Deliverables signed off on without benefits testing and validation
  6. Implementation plan developed independent of the business case
  7. No one knows how benefits will be measured after implementation
  8. Stakeholders remember the benefits number – but can’t articulate the components ….
  9. Team members can’t explain how their work contributes to delivering the benefits
  10. Benefits delivery responsibility rests on project instead of business sponsors and ADOPTION is absent

My guess is that a number of you are nodding your heads at some of these and probably coming up with a few more.  Allow me to comment on some of these and perhaps suggest a few more.  Number 4 is one that many clients are surprised by when we point it out.  Focusing on the task is ingrained and making the transition to benefit realization is not easy but totally necessary?   Number 7 is another one that becomes a challenge because you will remember that Value as defined by the Stakeholders is not always measurable by traditional methods.  Therefore, it’s critical that this be addressed at the time of the development of the Business Case and not wait till the end.  And of course, number 9 is absolutely critical from a Change Management perspective and having High Performance Work Teams.

So next time you are about to launch ANY initiative or are tasked with helping one already launched, feel free to pull out this blog – we think you’ll find it useful 😊.

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Dalip Raheja is President and CEO of The Mpower Group (TMG). Dalip has over 30 years of experience managing large organizations and change initiatives. He has worked across the spectrums of supply chain management, strategic sourcing, and management consulting.
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