GIB Blog

How to create a meaningful business case for your supply chain - Part 1

Photo by Glenn Carstens-Peters on Unsplash

It is often the prudent supply chain managers who recognize the need for technological enhancements to their standard SAP system. SC managers in particular have an eye on the management's requirements and know which key figures can be used to measure and check targets.  As a rule, business goals must be met without additional personnel resources, but even without this premise, the development of additional personnel capacity often fails due to a lack of skilled personnel. One solution to this dilemma can be to use the right software solution. However, even here the company management often finds it difficult, as considerable investments are sometimes necessary.  A convincing information basis supports the decision-making process by breaking down complex facts and processes into comprehensible packages and explaining them from different perspectives. As a supply chain manager, by creating such an information base, you acquire a sound knowledge of the processes, relationships and problem triggers and at the same time support and influence the decision-making process of company management. With the new deep understanding of the project, you will be able to give competent recommendations for action and present them confidently.


With such a "Business Case" you can show how the project affects the success of the company, you can show alternatives for action and highlight their scope and effect. The business case should by no means be limited to a purely financial consideration of action alternatives. It is important that all relevant aspects are examined and evaluated, including the benefits, effort, timeline and risk of the solution. The result is a meaningful overall picture.


A BC is a must in any case:
- an understandable and comprehensive presentation of the current situation
- current business processes
- the organizational basis
- the technological basis
- the meaningful key figures of the respective divisions


What does the digital maturity of the company look like? Can measures be derived from this which have to be carried out before the implementation of a new technology? How high is the personnel, structural and financial expenditure to create the necessary basis? What is the current status of the ERP system? Are upgrades, license extensions or even the change to new technological platforms necessary?


Risk - Benefit - Consideration


As the creator of the BC, you must ask yourself why it is necessary to take measures at all. Why the investment? Why all the effort?
In addition to the clear presentation of the essential current "pain points", it is necessary to prove the extent to which the approaches considered remedy them and which additional opportunities arise. How promising and long-lasting is the solution for the future?


Can cost advantages, process advantages or competitive advantages be generated? In a credible BC, several solutions are always compared and evaluated. A simple and clear evaluation and representation possibility offers itself here by means of Scoring models. SWOT analyses also offer structure and aggregate the essential key facts.  A clearly structured presentation with condensed information and clear core statements provides management with a solid basis for decision-making. On the one hand, the acquisition costs, the duration of the implementation, the resulting personnel expenditure during the introduction, as well as on the other hand the possibility to reduce costs, save resources or improve processes have to be considered. Also expected increases in turnover, e.g. through process optimisation, are to be shown and evaluated as monetarily as possible. Non-financial advantages such as economies of scale, agility and innovation should also be included. The flexibility of the solutions also plays a role: How can the solution be adapted to changing requirements and business processes? Are there any limiting functional limitations in the solution that rule out its use per se? Which "must criteria" do decision-makers apply in the company, e.g. integration capability into existing IT and software landscapes, creation of interfaces, etc.? At the end of each business case, the key facts should be presented at a glance and a clear recommendation made.
Such a business case offers you as a supply chain manager the security of having examined and evaluated all relevant aspects. The dossier also documents your prudence, foresight and accuracy. At the same time, you present yourself and your preferred solution to the management in a competent and well-founded manner and speed up the process of developing your own solution.

 

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