With a promising software provider determined and the backing of your network, it’s time to pull together your resources, construct a business case for the digital transformation, and make a strong and informed recommendation.
If you’re in a larger or public company, you will likely have a predetermined format for presenting a business case. Since this involves an investment decision, your finance organization should have a structured, formulaic template to use. Smaller or private companies will usually have a handful of people making the decision, with a greater focus on a “why and how much?” rationale.
Having sat through countless board and executive committee meetings in many different companies, and in a range of such scenarios, I’ve seen my fair share of both compelling and derailed presentations. Without getting overly prescriptive, here are some observations on the best ways to fully prepare, expect the unexpected, and make an effective business case.
Determine if the digital transformation is worthwhile.
Weighing the initiative’s attractiveness versus the likelihood of success is an effective way to determine whether the digital transformation is worthwhile. The former should reflect your assessments of time and cost to implement, as well as the magnitude of revenue, cost savings, and profitability. The likelihood of success should take into account whether customers would find the solution attractive, if other competitors offer a comparable solution, and whether your own company has the experience and competency to pull it off.
Convey a clear message upfront.
It may seem intuitive to leave the conclusion and recommendation for the end of the presentation. However, it’s common for time to run short, especially if unanticipated questions are posed along the way or someone hijacks the agenda and takes it in a different direction. A key person may also have to leave the meeting early. Plan for the unexpected by getting your message out early. State your position with the summary and recommendation upfront, and then take your audience through the proposal with supporting facts and details.
Keep it crisp and concise.
It’s common to get bogged down in the details and overstate your case. Inevitably, you will have more material than you need. Keep the presentation to a minimum, showcasing only the most salient points, and choreographing it for cadence to leave plenty of time for discussion. Place the remaining details in the appendix, where you can easily call upon them to back your claims. Those seeking further information can refer to this section on their own time.
Tell a story.
Presentations are most compelling when the main ideas are put into context. The business case should have a natural flow that is easy to follow and tells a story. My team and I would begin with our purpose – Why are we here? Some time will have elapsed since the project proposal was first incubated, so it’s helpful to reiterate what the project is all about and why it’s beneficial. We’d follow that up with some background, such as the current situation alongside the vision and future state of the company. To get from where you are now to where you hope to be headed, what are the conditions that require change?
Confirm consensus.
If opposition surfaces during the meeting, it will sidetrack your pitch and weaken your case. As you put the facts and figures together, consult ahead of time with all the constituents who will be responsible for delivering and executing the initiative. Get their input, perspective, and have them verify the numbers and validate any assumptions. Before the meeting takes place, you want to have gained their support and commitment to and accountability for the result. Pre-sell it within your organization! You should know the outcome before the meeting is held.
Ground your story with data.
In order to clearly articulate the business need and paint a picture of the future state, you should comprehensively and accurately outline estimated costs, timelines, and resources. Ensure the benefits you present are balanced and quantifiable and supported with facts and data. Key assumptions should be documented and realistic. Include a financial summary, pre-vetted by your finance team, listing ROIC, cash flow, balance sheet, and P&L impacts, as this project will affect both OpEx and CapEx. If you’ve run a sensitivity analysis, pick your most likely case and put the rest in the appendix for reference.
Demonstrate risk and impact.
If you have sophisticated and comprehensive investment models, show how the initiative will impact the company’s existing plan, as well as any adverse “out of plan” impacts to revenue, cash flow, and EBIAT. Fairly consider and compare alternatives within your backup material in the appendix. Risks should be represented, clearly understood, and followed by a mitigation plan.
What if it’s a bust…or too soon?
It’s possible that after all the effort and analysis, you’ll determine that the initiative just won’t work at this time. Not every project pans out. Schedule a meeting to convey your decision. Present your considerations and the logical steps taken to arrive at this conclusion. You and your team will be judged on business acumen and the validity of the verdict.
If your company is cautious and conservative, for instance, you may not want to take the risk. Some prefer to take a wait-and-see-approach from the sidelines to see how others tackle a digital transformation.
While taking the plunge carries many unknowns, keep in mind that first-movers have significant advantage. Conversely, companies that engineer out every bit of risk often lose their window of opportunity. Finding a happy medium is a balancing act. I prefer taking a stance that falls somewhere between maintaining the status quo and “betting the business.” Trust the direction of your intuition even if it makes you slightly uncomfortable.
Long ago, someone once gave me a lasting piece of advice: “Not every decision will be right, but you will make more right decisions than wrong ones.” If you’re choosing to take a chance and going through with the digital transformation, the next step will be its implementation. These don’t always run smoothly or easily, so in the next installment, we’ll be discussing how to map out a plan.
