How to write a business case. Examples and principles. Contemporary issues in science and education Other business case considerations

The rationale for the appointment of technical and facilities may be:

detection of major damage and defects in building structures during operation or construction;
the resumption of the interrupted construction of buildings and structures (without measures taken in due time for their conservation or after two years after the termination of construction);
expiration of the normative terms of operation of buildings and structures or their obsolescence;
reconstruction of buildings and structures, including in cases not accompanied by an increase in load;
the occurrence of impacts not provided for by the design - overload, high temperature or humidity, aggressive environment;
changing the functional purpose of a building or structure;
the occurrence of damage as a result of natural disasters or man-made accidents;
resolving issues on the possibility of restoring buildings and structures damaged as a result of hostilities or sabotage.

Inspection of building structures and structures is carried out, as a rule, in two stages:

preliminary inspection of building structures is carried out in order to obtain their initial assessment, as well as to establish the need for a detailed surveys of building structures.

With detailed survey of building structures the results of the preliminary survey are specified, including the determination of the strength and deformation characteristics of structural materials, the operational characteristics of the building are examined - temperature and humidity conditions, tightness, sound permeability, thermal insulation, illumination, and the necessary verification calculations of the bearing capacity and stability of building structures of the buildings and structures under examination are carried out .

Business Case Elements

There are no hard and fast rules for documenting the business case. Typically, you are trying to determine the tangible results of doing (or not doing) a given project. By tangible, we mean “measurable”—cost savings, increased productivity or capacity, increased revenue, increased market share held by the company, and so on. In the process of communicating with the people who are interested in your project, you can find out what is most important to them.

The list below will give you some idea of the types of material elements that you need to keep in mind when determining the business case for a project. Not all of these elements need to be documented for every project; however, the more complex the project and the greater the risk it poses to your organization, the more elements you need to include in your business case:

saving;
cost reduction;
opportunities for additional income;
increase in the market share owned by the company;
customer satisfaction;
cash flow analysis.

The cash flow analysis is documented as part of the business case for the respective project. The purpose of this review is to help reviewers (or committees) select projects that are suitable for implementation. We will look at several methods of cash flow analysis in the article on "Project Selection Criteria". In addition to measurable elements, the business case should also include intangible elements, including possible, albeit unplanned, costs to the organization. The list below contains a number of examples of this kind:

transition costs;
operating costs;
changes in business processes;
personnel changes;
recurring benefits.

Other Business Case Considerations

In addition to cost, benefit and cash flow analysis, the business case needs to consider alternative solutions or methods of practical implementation of the respective project. For example, there are thousands of vendors offering millions of products that can do x, y, and z, but each one comes at a price. Is, for example, a $2 million off-the-shelf solution a better option than an alternative solution that is partly outsourced and partly implemented in-house by the organization?

Questions of this kind often have to be considered in economic justification. Each of the alternatives must include both the tangible and intangible elements listed in the previous section. The economic justification should be completed with certain conclusions and recommendations. If the business case is properly prepared and documented, it speaks for itself. However, in any case, it would be useful to indicate which alternative is best for your organization.

The business case can be prepared by the custodian or project leader, depending on the culture of the organization concerned. However, regardless of who prepares the business case for the project, it is the custodian who is responsible for its financial performance, while the manager is responsible for the successful planning, execution and practical implementation. Figuratively speaking, the manager monitors the correct implementation of the project form, but fills the content (investments) in this form with the guardian, on which, in the end, the amount of profit provided by the final product (or result) of this project depends.

The business case is the reason that motivates an organization to undertake a particular project. This concept includes consideration of the benefits that the enterprise will receive from the results of the project. In addition, the business case considers various alternatives and also analyzes the project from a financial and economic point of view. The latter allows assessing the investment attractiveness of the project. How to write a business case? An example is in this article.

The essence of the concept

The business case is similar to the kind of analysis we do when planning a major purchase. For example, your own car. Suppose that we can allocate 35 thousand US dollars from the family budget for this purchase. The first step is to find out exactly which automobile concerns produce cars of the class we are interested in. Then we determine the main technical characteristics and agree on the final price with the company that sells these products. But that's not all. How to write a business case? An example in the question of choosing a payment scheme.

At the same time, there may be another situation when, first of all, the buyer is interested in the total amount that will have to be paid for a new car. This is especially true in a situation where the final price is affected by the amount of interest when it comes to buying on credit. In this case, it is advisable to choose exactly the option that provides the lowest interest rate. Another way is to find the offer with the lowest monthly payment. Such an acquisition will allow you to stretch payments for as long as possible. At the same time, the monthly amount of such a payment will not hit hard on your pocket. When carrying out a financial and economic justification, attention is paid to similar aspects.

Components of a business case

There are no clear rules for documenting the business case. Its main task, as in the case of the feasibility study of the project, is to determine the tangible or intangible results of its implementation. Material outcomes are those that can be measured.

Below is a list that gives an idea of those material components that are important in the process of formalizing the financial and economic justification of the project. It would be nice to say that not all of them require mandatory documentation. The need to fix them on paper depends on the complexity of the project, the cost and the number of risks for the enterprise.

Tangible Elements of the Business Case

In summary, the main tangible components of a business case are savings, cost savings, the likelihood of ancillary income, gains in market share, customer satisfaction, and cash flow estimation. In addition to the material components of the economic justification, it must also contain non-material components.

Intangible Business Case Elements

Among them may be probable, but not planned in advance costs of the company. Key intangible elements of the business case include transition costs, operating costs, business process transformation, and employee reorganization. In addition, recurring benefits are among the intangible components of the business case. How to write a business case? An example is below.

Other components of the business case

It should be emphasized that, along with the benefits and the evaluation of the cash flow in the EA, attention must be paid to alternative approaches and methods for implementing a particular project in practice. How to write a business case? An example in the following situation.

It is known that a large number of manufacturers of different products are represented on the market. However, each of them sets its own price for its own products. What to choose? An option that is a $2 million turnkey solution. Or an alternative solution that provides for partial acquisition from a third-party manufacturer and, to some extent, the use of its resources?

Actually, aspects of just this nature often have to be considered when compiling the economic justification of an enterprise. Any of the proposed options should include the previously listed tangible and intangible components. At the end of the business case, it is necessary to indicate proposals and conclusions. In addition, additional materials can be added to it.

Marketing research is a systematic and objective identification, collection, analysis, dissemination and use of information to improve the efficiency of identifying and solving marketing problems (opportunities).

Marketing research consists of six stages:

1) problem definition;

2) development of an approach to solving the problem;

3) development of a research plan;

4) field work or data collection;

5) data preparation and analysis;

6) preparation of the report and its presentation.

Market research subjects provide most of the information needed to make marketing decisions. They can be classified as internal or external. The internal subject of marketing research is the marketing research department within the firm. A large number of automotive companies, especially large ones (eg GM, Ford, DaimlerChryster) have their own departments. External market research entities are independent market research companies engaged to provide market research services. Together, they make up the marketing research industry, ranging from small, one- or a few-person staffs to very large, world-famous corporations.

Stage 1. Problem definition

The first step in any marketing research is to figure out the problem. When determining it, the marketer must take into account the purpose of the study, the relevant background information, what information is needed and how it will be used in making a decision. Problem definition includes discussion with decision makers (top managers), interviews with experts in the business area, analysis of secondary data, and possibly some qualitative research, such as focus groups. Once the problem is clearly identified, you can develop a marketing research plan and begin to conduct it.

Stage 2. Development of an approach to solving the problem

Developing an approach to solving a problem includes formulating the theoretical framework of the study, analytical models, search questions, hypotheses, and identifying factors that may influence the study design. This phase is characterized by the following activities: discussion with client management and subject matter experts, case studies and modeling, analysis of secondary data, qualitative research and pragmatic considerations.

Stage 3. Development of a research plan

The marketing research plan details the progress of the procedures necessary to obtain the desired information. It is necessary in order to develop a plan for testing hypotheses, identify possible answers to search questions, and find out what information is needed to make a decision. Conducting exploratory research, identifying the variables accurately, and determining appropriate scales for measuring them are all included in the marketing research plan. It is necessary to determine how data should be obtained from respondents (for example, conducting a survey or experiment). At the same time, it is necessary to draw up a questionnaire and a sampling plan.

More strictly, the development of a marketing research plan consists of the following steps: 1) analysis of secondary information; 2) qualitative research; 3) collection of quantitative data (survey, observation and experimentation); 4) measurement and scaling methods; 5) development of a questionnaire; 6) determining the sample size and conducting selective observation; 7) data analysis plan.

Stage 4: Field work or data collection

Data collection is carried out by field personnel who work either in the field, as in the case of face-to-face interviews (at homes in the community, at shopping sites, or using a computer), or from the office using a telephone (telephone or computer interview), either by mail (traditional mail and mail panel surveys with pre-selected families) or by electronic means (e-mail or the Internet). Proper selection, training, supervision and evaluation of staff involved in field work minimizes errors in data collection.

Stage 5. Data preparation and analysis

Data preparation includes editing, encoding, decoding and data validation. Each questionnaire or observation form is checked or edited and, if necessary, corrected. Each answer to the question of the questionnaire is assigned numerical or alphabetic codes. Questionnaire data is transcribed or typed on magnetic tape or disk or entered directly into a computer. Verification makes it possible to make sure that the data from the original questionnaires is deciphered accurately. For data analysis, one-dimensional methods of statistical analysis are used if the sample elements are measured by one indicator, or when there are several indicators, but each variable is analyzed separately. On the other hand, if there are two or more dimensions of each sample element, and the variables are analyzed simultaneously, then multivariate methods are used to analyze the data.

Stage 6. Preparation of the report and its presentation

The course and results of marketing research should be presented in writing in the form of a report that clearly identifies specific research questions, describes the research method and plan, data collection and analysis procedures, results and conclusions. The findings should be presented in a form convenient for use in making management decisions. In addition, an oral presentation using tables, figures and charts should be made to the management of the client company in order to increase clarity and impact on the audience.

Let us give an example of the effectiveness of marketing research. In the early 1980s, Chrysler was struggling to survive. Fortunately, a few years earlier, two executives from Ford, Lee Iacocca and Howard Sperlich, had joined the company. They brought with them a revolutionary idea - a minibus. Top manager Iacocca and chief designer Sperlich found out through market research that families had unmet transport needs. Despite the rise in gasoline prices in the early 1980s, market research through focus groups, point-of-sale, and mail-order surveys revealed that the consumer would like a van that could be driven like a normal car. It turned out that consumers needed a vehicle that was not a "workhorse" but a reliable, spacious and comfortable means of transportation.

Based on the results of marketing research, it turned out that the minibus just meets all these characteristics. As a result, Chrysler stunned competitors with the innovative development of such a minibus. She developed her product with a consumer focus, and not based on her internal capabilities. Market research gave Chrysler management the confidence to enter the minibus market, which GM and Ford considered too risky. These companies missed the opportunity to bring the minibus to market. GM's management feared that this would distract consumers from the high-margin multi-seat passenger car segment. Ford's management squandered this opportunity in favor of small, economical models.

Chrysler management, in contrast, took advantage of the customer's problem to develop a new product. And now, almost 20 years later, minivan sales still account for about a quarter of Chrysler's sales and a significant portion of its profits.

That is, marketing research, which brought the minibus to the market, brought the automotive giant back to life.

It can be concluded that marketing research is an important stage in marketing, allowing enterprises to control the needs of consumers and, as a result, satisfy them, while making a profit.

How to write a rationale? How to justify the proposed solution? (10+)

Rationale. Compilation Tips

Consider the rules for compiling justifications. First, we will discuss the general approach, then we will dwell on the particulars related to certain types of justifications.

Before writing a rationale, you need to answer two questions for yourself:

What do we want to justify? It is necessary to formulate the substantiated idea as briefly and clearly as possible.
Before whom we want to justify (further I will call these people conditionally "readers"). This is important to understand, since the base on which you need to rely depends on it.

Rationale Structure

Basic statements

First you need to formulate statements with which readers are sure to agree.

for instance, freezing of the water pipe will make the object unusable. The existing pipe laying depth is higher than the freezing depth.

for instance, the cost of liquefied gas is half that of motor gasoline, and the consumption per 100 kilometers is the same.

What do we want to justify?

Now you need to give a substantiated statement or concept.

for instance, I propose to re-equip the plumbing.

for instance, I propose to transfer vehicles to liquefied gas.

Logical chain

Let's build a logical chain

for instance, according to statistics, every three to five years in our region there are extremely low temperatures that our water supply system cannot withstand. In case of freezing of the water supply, it will have to be shifted in any case. This will take one to two weeks. At this time, we will not be able to produce products and will lose income.

for instance, the cost of installing gas equipment for one car is 40 thousand rubles. The daily mileage of one car is 300 km, and the cost of gasoline is 1000 rubles. in a day. Daily savings will be 500 rubles. The payback period of the project is 80 days.

Supporting materials

For example, in the application, meteorological tables with a minimum temperature for the last 30 years and standards for laying water pipes depending on temperature.

For example, in the application there is a commercial offer from a supplier of gas equipment, safety certificates, data on current fuel costs, materials confirming gas consumption per 100 km.

Objections. Protection

According to the first example, there may be objections:

The water supply has been in operation for three years and has not frozen.
High cost of plumbing.

For the second example, there may be objections:

Gas equipment is unstable at low ambient temperatures
Lack of gas filling stations along the route of cars.
Less security.

Here are some explanations for these objections:

First example

Over the past three years, there have been relatively warm winters. But relatively warm periods are always replaced by extremely cold ones.
A complete overhaul is not required. It is possible to equip the water supply system with an automatic periodic water run to prevent freezing.

Second example

It is planned to install equipment that involves switching gasoline / gas. At low temperatures, starting and warming up will be carried out on gasoline.
The gas filling station is located 10 kilometers away from the route. Refueling will be required every 200 kilometers, that is, the route will be extended by 20 km (to refueling and back). It's 10% and the savings is 50%.
Standards for gas equipment guarantee its safe operation if the requirements are met.

Conclusions. Draft decision

According to the first example. I propose to make a decision on the installation of an automatic water supply system from freezing.

According to the second example. I propose to make a decision on the conversion of the fleet to gas.

Alternatives

In conclusion, it is sometimes useful to review alternatives to show that they have been analyzed and to point out the advantages of the chosen solution over the alternatives.

Separate types of justifications

There are some standard types of justifications. They differ in the considerations on which decisions are made and in what is justified.