The document discusses business case development and provides templates for creating business cases. It includes a business case development toolkit, templates for quantitative analysis elements like financial analysis and benefits modeling, and an embedded Excel business case template. It emphasizes validating identified benefits and opportunities and translating them into quantifiable financial impacts to build a robust case.

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5. The structure of a business case is built on a combination of four separate, yet interlinked, quantitative analysis elements The extent of each element varies from case to case—but, they are always there. Enabling Element Core Deliverables Quantitative Analysis Elements THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/ Bottoms-up Benefits Case Business Modeling Top-down Business Case Financial Analysis BUSINESS CASE ELEMENTS

8. The combined top-down and bottoms-up approaches triangulate to form the final business case Final Top-down Business case Final Bottoms-up Benefits Case Aspiration Hypotheses Benchmarks Baseline Implementation Prioritization Leveraging the Opportunities Analysis Preliminary Top-down Benefit Evaluation Benefit Scope by Area Final Business Case Realized Benefits Focus on Major Benefit Levers $$$ Bottoms-up Approach Top-down Approach Proposed Issues Quantitative Analysis Elements – Top-down & Bottoms-up Approaches (3 of 3) THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/

9. Any financial and quantifiable benefit must fall into one of five benefit categories Quantifiable Non-quantifiable Categorize the financial, quantifiable benefits into the 5 benefit categories for structure in the financial model. All Financial and Quantifiable benefits must fall into 1 of 5 benefit categories BENEFIT CATEGORY DEFINITION 1 2 3 4 5 Phase 1, 2 – Financial Decomposition & Opportunity Identification THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/ Financial Decomposition Opportunity Identification Opportunity Quantification Benefit Validation Business Case Finalization Non-financial Financial Capture qualitatively Capture qualitatively Capture qualitatively Capture quantitatively Similar to Cost Avoidance, but avoiding a capital expense (as defined by Corporate Finance/Accounting) Capital Avoidance Similar to Cost Reduction, but reducing a capital expense (as defined by Corporate Finance/Accounting) Capital Reduction This benefit will allow the company to avoid (i.e. eliminate) a cost completely Cost Avoidance This benefit will reduce (but not eliminate) a cost Cost Reduction This benefit will increase revenues (e.g. service upsell) Revenue Enhancement

12. The financial modeling process involves calculating key financial metrics, such as ROI and Payback Period Phase 5 – Business Case Finalization Define key assumptions and financial metrics to drive financial modeling COMMONLY USED FINANCIAL BUSINESS CASE METRICS Source: Investopedia (for more information) If these concepts are new to you and unclear, examine the calculations used in the embedded Excel model (on slide 25). THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/ Financial Decomposition Opportunity Identification Opportunity Quantification Benefit Validation Business Case Finalization This is the time it takes for a project to recover its initial costs and start generating a positive return for the company. Since most models are set at a 5-year horizon, the payback period should occur within 5 years. Payback Period ROI is a performance measurement of how profitable the project or investment was. It is a percentage symbolizing the profit as a percentage of total investment. Usually, we calculate the ROI for the snapshot at the end of the 5-year timeframe. Return on Investment (ROI) NPV is a concept used to measure present value of future cash flow. This is done by discounting the cash flow by the discount rate. E.g. with a discount rate of 10%, the NPV of $5MM in year 2 is $5MM/(1 + 10%) 2 Net Present Value (NPV) By definition, this is the minimum acceptable rate of report for any internal project that the company takes on. This is defined by Corporate Finance and for most companies, it is 10% (annually). This value is crucial, as it drives all the key financial calculations (e.g. NPV, ROI). Discount / Hurdle Rate Most business case for capital budgeting models have a 5-year timeframe. Timeframe

13. The financial model provides a summary of the benefit case, cost of investment, and calculated financial metrics to help drive to a decision Phase 5 – Business Case Finalization Financial Benefits Breakdown of the quantifiable, financial benefits broken down by Revenue Impact, Cost Impact, and Capital Impact Cost of Investment Breakdown of the costs involved Cash Flow Analysis Core Financial Metrics Source: This screenshot is taken from the Excel spreadsheet included with this presentation (slide 25) THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/ Financial Decomposition Opportunity Identification Opportunity Quantification Benefit Validation Business Case Finalization

14. As you identify potential benefits, map these benefits against the attributes of quantifiable and financial Sample Business Case Model Double click to open the Excel financial model NOTE : If you are having trouble opening the embedded Excel file, you can download it online at this web address: URL REMOVED FROM PREVIEW THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/

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