Business Case Modelling and Benefits Estimation

When a company makes the decision to automate (one or more of) their RM and Pricing processes, they make a huge commitment in terms of cost and human resources. What's more, the company will have to make changes to the organisation, IT infrastructure and business processes that are very hard to reverse. Naturally, an annual revenue uplift of 2-5% - as is often quoted as a typical benefits range - creates a sizeable budget, including some slack to account for risk, but a software implementation project should never be approved on the basis of financial projections alone.

Pieter Dorhout Consulting can assist in estimating both the gain and the pain that can be expected when embarking on such a project. 

While it is notoriously difficult to prove beyond doubt what the exact impact on the bottom-line will be, using a transparent and realistic benefits modelling framework is certainly a good start. Even the most rudimentary estimates should be backed up by at least anecdotal evidence based on real data, and more thorough estimations may involve simulation of a number of future scenarios. In addition to the quantifiable benefits, we will also include an assessment of the intangible benefits, as these are often perceived as extremely valuable.

Benefits alone do not add up to a business case. To estimate the 'pain' of both implementation and ongoing ownership is equally important, and just as challenging. A rough estimate of the various cost categories is relatively straightforward to obtain, but the real challenge is to understand the variance around these estimates, which represents the risk of the project. If the assumptions underlying the cost, time and effort estimates are unrealistic, then the actual costs could easily become a multiple of the estimate. This would clearly undermine the business case, but the resulting delay and uncertainty can also leave the organisation in a vulnerable state for a considerable time.

Some questions that Pieter Dorhout Consulting can help you answer:

  1. Are our plans feasible and realistic, and what are the main risks?
  2. What are the expected financial and other benefits we can expect?
  3. Which aspects of our current, manual way of managing our business will be most improved?
  4. How much will it cost to achieve this, and what are the ongoing costs of ownership?
  5. What is the expected NPV, ROI and/or payback time?

In other words, building a business case is something where an independent and experienced advisor like Pieter Dorhout Consulting can play an invaluable role!

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