Building a Solid Business Case
Depending on your company’s management style and the scope of your product vision, you will likely need to build a solid business case. A business case is an analytic tool that helps product manager’s justify an investment in a market opportunity. This analysis can also be used to justify spending funds to resolve a business challenge. Business cases are an essential element of a product managers toolkit.
Some companies rarely ask product managers to provide a business case. They instead allocate a set number of assets to a product area and expect product managers to their budget. Other companies insist that product managers build a cost benefit analysis supporting their plans for each investment.
As a product manager you should plan on developing a business care for every investment that does more than simply enhance your existing product’s functionality. Any time your plan involves moving your product into new territory you need financial justification for your plans. This includes when you develop wrap-around service offerings or tiered offerings with varying degrees of value.
What Is a Business Case?
A business case is a well-considered, fact-based proposal advocating a specific course of action. Product manager’s usually develop the business case. The goal is to provide enough support to convince decision-makers of your proposal’s worth. As the person responsible for your product you will need to show why a financial investment is needed and what value will come from the investment.
Although exact requirements vary between organizations, most business cases include the following:
- An executive summary
- A problem or opportunity statement
- A solution overview
- Alternatives considered
- Cost estimates
- Benefit analysis
- Implementation timeline
- Critical assumptions and risks
- Conclusion and final recommendations
In my next post, we will explore the different components of the business case. By the time we finish the list, you’ll know how to create a convincing case to support your plans.