Ray Collis

What Is The Business Case?

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One of the most powerful realizations for sellers is that when it comes to the complex sale there are no buying decisions, only business decisions.

The implication is that buying decisions which in the past focused on the what, where, when and how, are now purely concerned with the ‘why?’

Peel back the layers of any important buying decision and you will find the business case at the core.

The Business Case is at the Core of The Buying Decision

Business Case Core

For those who have studied business, almost at any level, business logic and the business case should be something very familiar. It is the application of business 101 principles — in other words business decisions should be made to maximize (long-term) economic return.

Managers have a responsibility to their shareholders — to grow profits, revenue and asset values. This requires the application of hard-nosed business logic to all business decisions, including those relating to major purchases. It also requires decision making that is based on good information, analysis and planning.

The Business Case Examined

Before managers or departments can get ‘the green light’ for a major purchase they must answer in a compelling way the following questions:

  • Why fund this expenditure?
  • Why now?
  • Why support this project instead of another?>

These questions can only be answered by reference to the business case.

In a turbulent marketplace, with greater uncertainty, heightened sensitivity to risk and pressure on budgets, managers need a compelling reason to commit to new projects and expenditures. That reason is communicated by means of the business case.

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