Building a business case is in some ways similar to building a house. It requires solid foundations, plenty of research, and a well-designed structure. Fail in any one of these areas, and just like the house, your business case is likely to crumble under pressure.
What is a business case?
A business case sets out the reasoning behind a new initiative, strategy, or action. It can take the form of a written document, a presentation deck, or video, and the aim is to communicate the reasoning behind a new course of action.
Business cases are most commonly required when seeking investment for something, whether that is financial or you’re simply trying to win support from a decision maker. A compelling business case often includes research, data points, a defined plan of action and the benefits expected, such as return on investment.
How develop a business case: 5 tips to consider
1. Dig out the data
Just like the saying ‘there’s no such thing as a free lunch’, most initiatives implemented by HR require some level of investment. That’s why understanding how to develop a convincing business case is an extremely useful skill for HR professionals. So where do you begin?
First, a solid business case starts with data. In the past, the HR industry has been ‘hunch-driven’ because we weren’t able to measure the impact of HR in an accurate or meaningful way. But with the advancement in technology and the integration of HR solutions, organisations can now survey and measure almost every touchpoint throughout the employee lifecycle.
The reason that’s so important is because one person’s perception of how the business is doing from a people management perspective can be wildly different to another. If you’re in a team that’s experienced a lot of turnover and uncertainty, your perception is going to be the opposite of someone who is in a connected and stable team.
Making decisions based on data reduces this proximity bias and gives a more black and white view of what’s going on, at both the organisation-wide and team level.
Beyond the data from your own workforce, external research is useful to compare how your organisation stacks up and consider how other businesses are tackling similar problems. Seek out reputable and recent research to understand the issue at a macro level.
2. Align outcomes with organisational goals
Too often, HR professionals fail to communicate why their initiatives matter to the business from a commercial point of view. To capture the attention of your C-suite, talk in a language they understand. In other words, elevate the problem from an HR issue to a business issue.
Ask yourself: How is the cost of this problem impacting the business’s ability to meet its revenue goals? How much time and money is being wasted because of this problem? How much could we save each year by taking action?
By quantifying certain aspects into dollar figures, HR professionals can drive home the potential savings. Again, use external research or tools such as ROI calculators to estimate the cost benefit to the business. Try the ELMO Recruitment ROI calculator to see how much time and money you could save.
3. Take a three-pronged approach
When building out a business case, consider arguments that fit into these three areas: Financial, ethical and legal.
For some leaders, the ethical reasoning is powerful enough. Take mental health initiatives as an example. The ethical argument is that employers should contribute to the mental health of their employees because it’s the right thing to do. Because we are all human, we are all fallible and our work should not be a place that damages us – either physically or mentally.
For others – and that often includes our friends over in finance – the strongest argument concerns the bottom line. For example, how does better mental health impact the business’s ability to generate revenue?
Being able to quantify your argument is key for this financial approach. Aim to demonstrate current costs, how much is being wasted, how much could be saved, and the potential return on investment. For some initiatives, it is simply very difficult to accurately measure ROI. But by setting out the current expenditure, you can highlight any obvious savings and benefits.
Finally, legal. Consider whether there is a legal argument to be made to strengthen your business case. If so, look into literature from past cases available online from the Fair Work Commission in Australia and the Employment Court of New Zealand. Past cases highlight the risks businesses face and give an indication as to how the court has dealt with certain issues. Alternatively, seek legal advice.
4. Create a convincing narrative
Data is important, but HR professionals also need to be able to build a narrative behind the numbers if they want to convince business leaders. This requires digging further to find out why a trend is occurring. For example, if you have spotted the new hire turnover rate is above a healthy level, follow-up questions should include: Who is leaving, when are they leaving, and why?
Seek qualitative data through open-ended questions to complement the numbers and bring your narrative to life. This can be done through surveying technology, 1:1 feedback opportunities, or group listening sessions. ELMO Survey helps HR professionals to collect, manage, analyse and compare data throughout the employee lifecycle.
Taking the earlier example, if you’re building a business case for onboarding technology in a bid to reduce the new hire turnover rate it’s going to be critical to first pinpoint where the issues are. If feedback from new hires reveals a sloppy onboarding experience that makes them lack confidence in the company, then there’s a strong case for technology to improve the process.
Finally, ensure your narrative has a structure. Start with context, followed by the problem, the impact on the business, the proposed solution, and the benefits you expect to see.
Pay close attention to how you’re communicating the argument you’re trying to make. As mentioned already, data is vital but it won’t do all the work. Ensure the graphs you’re using focus on the point you’re trying to make in each slide or page. Strong visuals should almost tell the story for you without having to use any words, so it’s worth spending time on how your business case looks.
Like in step two, don’t forget to align outcomes with strategic goals of the business to drive home why it really matters. Keep that sense of alignment front of mind when designing your business case.
ELMO Software is a cloud-based solution that helps thousands of organisations across Australia, New Zealand and the United Kingdom to effectively manage their people, process and pay. ELMO solutions span the entire employee lifecycle from ‘hire to retire’. They can be used together or stand-alone, and are configurable according to an organisation’s unique processes and workflows. Automate and streamline your operations to reduce costs, increase efficiency and bolster productivity. For further information, contact us.