John O' Gorman

The Business Case Is King!

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One of the key trends of concern to sellers is the rise in importance of the business case in the making of important buying decisions. The reality is that the business case is King and that means sellers must bow before it.

(a) Putting the Business Decision First

Major purchase decisions are first and foremost important business decisions. They are generally part of a larger project, or a bigger strategy. just one piece of the larger organizational jig saw.

Because major purchases represent important business decisions and projects, it is no surprise that business decision making and project planning principles are being applied to buying.

That means major buying decisions must be underpinned by indisputable business logic, communicated in the international language of numbers. Impulse, discretion and emotion have been supplanted, by planning and analysis driven by the requirements of the business case.

(b) The Rise of the Business Case

Vendors write sales proposals. But does that really help buyers must produce a business case? Buyers must take pen to paper and justify their planned purchase in a document that will be scrutinized dispassionately by many. They must calculate the costs, benefits and risks equation of their project, or purchase often to a level of sophistication that is would impress a university professor. Their proposal will then live, or die based on its business case.

(c) The ‘Living’ Business Case

However, the business case is not just a document. It is a framework for planning, decision-making, implementation and review. It has a full project lifespan, increasingly starting well in advance of the purchase and ending only after project success is achieved.

The business case is a living and breathing entity that grows in sophistication over time, from the preliminary document created at the outset and easily summarized on one or two pages to a comprehensive document with financials in toe.

The business case involves a process of extensive involvement with stakeholders and is written, or at least reviewed, in cross functional committees. Once the purchase decision is made business case is used to track implementation and project success, being updated as required to reflect the changing conditions in the organization and its environment.

Seller Implications

  1. Vendors must ask how they can impact on the performance and further the strategic goals of the buyer’s business. They must see the bigger picture –that is their sale in its wider project, or strategy context.
  2. Vendors must understand all of the buyer’s options and alternatives, including competing projects, doing it in house, or delaying a decision.
  3. Instead of writing sales proposals, vendors must help buyers to build the business case.
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