When it comes to prioritising effort and budget, and understanding risk and opportunities associated with digital transformation, a business case is an essential tool. A compelling and comprehensive business case empowers your leadership team and board to make an informed decision to support the project.
Even if your IT team (or your whole organisation) takes an agile approach and prides itself on being nimble and responsive, a business case is still an essential starting point!
At its simplest, a business case covers the what, why and how by:
- Defining the problem your project will solve (what)
- Explaining why the problem is worth solving (why)
- Providing some detail about the costs, benefits and approach (how)
Translated to digital transformation projects, a compelling business case will also include:
- The critical business drivers that make digital transformation necessary for your organisation
- Clarity around return on investment (ROI)
- The key risks and challenges to expect when embarking on digital transformation.
Critical business drivers for digital transformation
Critical business drivers can arise from opportunities or pain points. Whether you are addressing challenges that are holding your business back, or seeking opportunities to attract and retain customers and keep up with changes in the digital landscape, your digital transformation business case will propose a solution that:
- improves customer experience
- optimises operations
- drives new revenue streams.
Our top tips for ensuring your business case aligns with business drivers.
- examining your existing processes
- gathering data on inefficiencies, and
- defining goals that align with broader business objectives.
Use this information in your business case to tie digital transformation investments to measurable outcomes such as cost savings, revenue growth, or improving your competitive edge.
How to measure the ROI of digital transformation
When assessing a business case, leadership teams and boards invariably want to know about return on investment. Unfortunately, quantifying ROI is not always easy for digital transformation projects. While some cost savings and efficiency gains may be measurable in the short term, longer term benefits may be harder to quantify. It can also be difficult to quantify the opportunity loss or risk impact that could result if the project does not proceed.
Our top tip for discussing ROI in your business case:
- Define short-term benefits like cost savings and efficiency gains.
- At the same time, factor in long-term value such as market share growth and customer retention.
- Have a benefits register that clearly defines and categorises benefits, this should include measures relative to current measure and target measure. Make sure every benefit has an owner: someone within normal operations who job it is to make sure the benefit is delivered.
- Benefits can be tangible and intangible -both a important
- Be clear on costs and be transparent on how costs are calculated. Boards and decision makers need to feel confident in the numbers.
- ROI will generally be presented as a number but always provide a narrative – ROI does not consider intangible benefits and they matter,
- Emphasise the intangible benefits, like improved decision-making and organisational agility to present a balanced view of financial and strategic gains.
What are the key risks or challenges for digital transformation?
Digital transformation projects often bring a number of specific challenges. Extending beyond considerations of cost, effort and risk, they can include organisational resistance to change, lack of stakeholder buy-in, misaligned or immature strategies, or technical complexities and integration requirements.
Our top tips for addressing digital-transformation-specific challenges in your business case:
- Identify challenges and address each with tailored mitigation strategies.
- Ensure stakeholder buy-in through early engagement.
- Build on a solid foundation and have a long term plan.
- Consider phased implementation as a way to manage risk.
- Build flexibility into your approach to allow you to adapt to unforeseen challenges.
- Commit to a robust governance framework and continuous stakeholder communication.
How 9Yards can help you develop a business case
Digital transformation often affects multiple departments. Getting the business case (and the project) set up for success requires active engagement and alignment across the organisation.
Teams developing business cases for digital transformation projects also frequently underestimate the time and resources required for digital transformation.
At 9Yards we employ a trusted, tested and successful approach to business case development, with a track record of working with mid-sized organisations in particular to navigate this critical first stage of digital transformation. Our approach is driven by holistic design thinking based on good foundations created by good architecture.
Our team of expert consultants will take a phased approach to your digital transformation project.
To support the success of the project, we engage key stakeholders early on and tailor our messaging to each department’s priorities, operational efficiency for operations or revenue growth for finance.
In short, we’ll work with you to create a business case that:
- defines – at least at a high level – your digital transformation target state
- Aligns with organisational goals, identifying critical business drivers, risks and opportunities
- demonstrates short-term wins and long-term strategic benefits
- breaks down the process into manageable steps
- provides clear timelines for each phase
- highlights quick wins and long-term objectives
- addresses change management, integration challenges
- builds in flexibility for iteration as the transformation progresses.
You can build a business case in-house. However at 9Yards we’ve found that our expertise in this area can help teams define and present a business plan that will set your digital transformation project up for success right from the start.
Are you ready to develop a business plan that steers your digital transformation project in the right direction? Contact us to speak to one of our digital transformation experts about how 9Yards can help.
