The assignment is based on my case about HBP.
The form is the same as Word Business Case Template. (You can copy and paste from my words if possible)
Check the ABC MedTech Business Case Example,
“prepare the Results or Outputs portion of your Program Logic Model, including sections 2.1, 2.2, 3.1 and 3.2 in the template.”
So basically is 1.1 2.1, 2.2, 3.1 and 3.2 which is talking about my HBP case.
My case (about HBP):
https://drive.google.com/open?id=1whoTe20X1lC1VBa7…
Professor’s promt about this assignment:
Using the attached Word Business Case Template, and the ABC MedTech Business Case Example,
prepare your Program Logic Model, including sections 2.1, 2.2, 3.1 and 3.2 in the template.
[DOCUMENT TITLE]
Business Case
Originator: [name]
[Date]
How to Use This Document
The following template will help you craft your business case narrative. Replace the instructions with
your own information.
To see an example of a business case rendered in Word, open the ABC MedTech Case (PDF).
TABLE OF CONTENTS
Purpose: Communicate to your audience what to expect from your document.
• List each section of your presentation.
1.1 Executive Summary
Purpose: Grab your audience’s attention by telling the story of your business case.
• Briefly state the problem or opportunity.
• Describe how you plan to address it. You might describe one option or include up to three,
depending on your stakeholders’ preferences.
• If you’re presenting more than one option, make clear which one you think is the most viable.
1
2.1 Business Need—Opportunity/Problem Statement
Purpose: Establish a sense of urgency for the opportunity or solution.
• Projects are initiated to solve problems or take advantage of opportunities. Describe why you’re
proposing the project—what is the business need?
• Articulate your understanding of the underlying issue using data and analysis. If your
stakeholders don’t understand or don’t agree with your articulation of the problem, they’re going
to take issue with everything else in your business case. See the ABC MedTech Case and the
XYZ Energy Case for examples of a business need analysis.
• Share data that conveys urgency.
2.2 Business Need—Clinical and/or Business Objective
Purpose: Explain how the project is connected to your/the company’s objectives.
• Explicitly connect the need to the company’s strategic goals or mission.
• What is the desired measurable outcome of this project? What outputs are required to achieve this
outcome?
• Whenever possible, list specific concrete (SMART) goals.
• Describe the situation in enough detail that it is clear to the reader why the project objective(s) are
desirable.
3.1 Project Overview
Purpose: Help stakeholders understand the scope of your proposed project.
• Provide a high-level description of the solution(s).
• If it’s a new product or an upgrade to an existing product, lay out the general concept, and explain how
it fits in with existing offerings.
• For a productivity initiative (such as an IT project that allows a customer to handle a situation faster),
specify which business processes it will affect, and which costs it will eliminate or reduce.
• If you’re including more than one option, highlight key differences so that stakeholders can quickly
compare. You should include a brief overview of the substitutes or alternatives that were considered
that could have also addressed the need, and why your recommended solution is better.
3.2 Critical Assumptions and Constraints
• Assumptions are those things that you believe are true today. They are not things you wish were true
or hope are true. They must be based on sound reasoning or judgment.
• Constraints are those things that constrain the project or hold it back. Most projects are constrained by
time, money, and people, but you can also have other constraints such as facilities, equipment, strict
quality requirements, government regulations, etc.
2
4.1 Schedule
Purpose: Lay out a high-level plan for implementing the project
• Explain how long the project will take (quarters or even years) and list all key milestones or major
deliverables.
• Be sure to include all deliverables from the Work Breakdown Structure (WBS)
• There are almost always risks to a project schedule. You can include them in your “Risks” section.
4.2 Team
Purpose: Identify the team required to make the project a success.
• List the total number of necessary full-time equivalent employees (FTEs) and core team members
(by function). Convert part-time employees’ time to full-time equivalents (~40 hours/week=full-time)
• Include subject matter experts (SMEs) who will need to contribute to the project.
4.3 Other Resources
Purpose: Identify all material resources the project will need.
• Explain all resources required—technology, equipment, facilities—required for the project.
• Outline any special resources required—such as access to locations, etc.
• Whenever possible, include how long you’ll need the resources for (and be sure to account for any
costs in your calculations).
3
5.1 Impact
Purpose: Highlight the benefits of the project.
• Describe the benefits. Benefits mainly consist of revenue and productivity savings (benefits you’ll
achieve through greater efficiency) but may also be from cost avoidance (such as decreased
healthcare costs).
• In this section, you only present the benefits. You’ll address costs below.
• Do not only include benefits that you can quantify. Define the impact as precisely as you can (customer,
value proposition, lack of substitutes/alternatives). You may mention intangible benefits, such as
improved morale or increased customer satisfaction, but stakeholders will want to know the monetary
impact, too.
• Be clear about where these numbers come from—did you get them from secondary research or primary
research? State the source. Stakeholders care about the sources for these assumptions and are more
likely to trust your numbers if the information comes from people/organizations they trust.
6.1 Risks
Purpose: Highlight the key risks to the project.
• Explain what might not go as planned—whether positive or negative. Most people focus on threats
(e.g., What if the vendor doesn’t deliver on time? What if the cost of raw materials goes through the
roof?). But you need to consider opportunities as well (How can you get a faster payback? Can you
complete the project sooner?).
• Identify the likelihood of the risks: high, moderate, low.
• If there are no major risks, say so. But make clear that you’ve thought through the possibilities!
• The primary risks you’ll want to consider are to costs and schedule. But you may also want to think
about the following:
Personnel: What if the person running this project leaves the company? What if you don’t get all the
team members you requested?
Technology: What if you encounter bugs when testing? What if employees struggle to adapt to the
new system?
Scope: What if the project needs to include more (or fewer) geographic regions, employees, or
customers? What if the stakeholders change requirements?
Quality/performance: What if the product doesn’t perform as you expect it to—for better or worse?
What if quality suffers because of a tight schedule?
7.1 Budget
Purpose: Lay out the financials of your project.
• High level funding requirements, that may include a year-by-year overview and Return on Investment
(ROI).
• If a financial analysis was performed (NPV, IRR, etc) (not common on purely clinical projects), the
method used should be described briefly along with a summation of the results
• Include the total costs and benefits of your project. It’s not necessary to go into detail on specific figures
unless there are unusual expenses that require explanation.
4
• Include your calculations. The more results you provide, the better your stakeholders will understand
the value of your project relative to others they are considering.
7.2 Budget Narrative
Purpose: Address specific line-item details from budget form
• Include a narrative with the financial information: show calculations, assumptions, etc.
• Consistent with the program narrative (staffing plan, project activities)
• Identify any in-kind contributions
5
SMARTER THAN THE AVERAGE GUIDE
HBR Guide +
Tools for
Building Your
Business Case
ABC MedTech Case
How to Use This Document
While every company handles business case reviews differently—and
you’ll want to follow your organization’s process—the following example
will show you one well-wrought case in Word.
Once you’ve reviewed this example, go to the Word Business Case
Template to begin crafting a case customized with your information.
If your company requires a slide deck presentation, see the XYZ Energy
Case for an example rendered in PowerPoint.
This example is for a medical device upgrade project, but the format and
flow of information may be applicable to a business case for any type of
project. Your case may follow this format closely, or you may decide to
modify, add, or delete sections.
Upgrading a medical device is, of course, a complex project, but you’ll
see that this case does not go into great technical detail. This is true of
most strong business cases—while they may cover complicated issues
and solutions, the cases themselves are straightforward and easy to
understand.
With each section, you’ll find specific directions and references to the
HBR Guide to Building Your Business Case.
Product #16980E
Copyright © 2013 Harvard Business School Publishing. All rights reserved
ABC MedTech Case
1
TABLE OF CONTENTS
ABC MEDTECH
CASE
Originator: Alan Adams
April 20, 2012
TABLE OF CONTENTS
1.1 Executive Summary
2.1 Business Need—Opportunity Statement
2.2 Business Need—Fit with Strategy
3.1 Project Overview
4.1 Schedule
4.2 Team
4.3 Other Resources
5.1 Impact
6.1 Risks
7.1 Financials
8.1 Signature Approval to Initiate
1.1 Executive Summary
We’re facing tough competitors in one of our key markets: cardio ultrasound equipment. The ABC
MedTech platform, originally launched in 2001, enjoyed nearly 100 percent market share for a
decade. For the past three years, our share has fallen. This year it hit its lowest point—52 percent—
and we anticipate that it will continue to fall unless we upgrade the platform. This case proposes a
complete redesign of our platform, integrating the most up-to-date technology, so that it can compete
on speed, accuracy, and test type with platforms offered by our primary competitors, Millennia Tech
and Eon Health.
The new ABC MedTech Ultrasound platform will be the most powerful cardio ultrasound equipment
on the market. We project $750,000 in gross profit from sales in 2013 and just over $1 million for
each of the following three years, 2014–2016. Over six years, the NPV will be just over $2 million.
ABC MedTech Case
2
HBR Tools for Building Your Business Case
1
Table of Contents
Tell your audience what to expect from
your document.
• List each section of your presentation.
READ MORE
HBR Guide to Building Your
Business Case
Chapter 13: Prepare Your
Document or Slides
Section: Make a Structured
Argument
ABC MedTech Case
3
EXECUTIVE SUMMARY
ABC MEDTECH
CASE
Originator: Alan Adams
April 20, 2012
TABLE OF CONTENTS
1.1 Executive Summary
2.1 Business Need—Opportunity Statement
2.2 Business Need—Fit with Strategy
3.1 Project Overview
4.1 Schedule
4.2 Team
4.3 Other Resources
5.1 Impact
6.1 Risks
7.1 Financials
8.1 Signature Approval to Initiate
1.1 Executive Summary
We’re facing tough competitors in one of our key markets: cardio ultrasound equipment. The ABC
MedTech platform, originally launched in 2001, enjoyed nearly 100 percent market share for a
decade. For the past three years, our share has fallen. This year it hit its lowest point—52 percent—
and we anticipate that it will continue to fall unless we upgrade the platform. This case proposes a
complete redesign of our platform, integrating the most up-to-date technology, so that it can compete
on speed, accuracy, and test type with platforms offered by our primary competitors, Millennia Tech
and Eon Health.
The new ABC MedTech Ultrasound platform will be the most powerful cardio ultrasound equipment
on the market. We project $750,000 in gross profit from sales in 2013 and just over $1 million for
each of the following three years, 2014–2016. Over six years, the NPV will be just over $2 million.
ABC MedTech Case
4
HBR Tools for Building a Business Case
1
Executive Summary
Grab your audience’s attention by telling
the story of your business case.
• Briefly state the problem or opportunity.
• Describe how you plan to address it. This case presents
only one option—the platform upgrade—but sometimes
you might include two or three options, depending on your
stakeholders’ preferences.
• Preview the benefits—why the solution makes sense.
READ MORE
HBR Guide to Building Your
Business Case
Chapter 10: Calculate ROI
Chart: Four Ways to Calculate ROI
Chapter 13: Prepare Your
Document or Slides
Section: Telling Your Story in the
Executive Summary
• State the return on investment (ROI)—it’s the satisfying
end to your story. In this example, it’s the net present value
(NPV), but use whichever ROI calculation your stakeholders
will care most about—NPV, internal rate of return (IRR),
breakeven, or payback.
• If you’re not sure which calculation to use, see the ROI
Worksheet Template included with this product, or
Chapter 10: Calculate ROI, in the HBR Guide to Building
Your Business Case.
ABC MedTech Case
5
BUSINESS NEED—OPPORTUNITY STATEMENT
2.1 Business Need—Opportunity Statement
There is increasing demand in the U.S. for noninvasive diagnostic health-care equipment because of
the aging of the population and the high cost of surgery. As the incidence of heart disease continues
to rise, the market for cardio ultrasound equipment is expanding. Our primary product in this area, the
ABC MedTech platform, was introduced in 2001 and quickly dominated the market, commanding
virtually 100 percent of the market share. However, Millennia Tech and Eon Health entered the
market in 2008 and 2009 with enhanced products using state-of-the-art technology that surpassed
our product’s capabilities. The current system’s market share is at 52 percent and falling. We stand to
lose significant revenue as customers continue to defect to Millennia and Eon.
Cardiologists, the primary customer for cardio ultrasound equipment, are requesting better and faster
analytics and are willing to pay a higher price for a platform that meets these demands. Our sales
team has confirmed several target customers interested in, and willing to purchase, an upgraded
platform.
2.2 Business Need—Fit with Strategy
This project is aligned with our five-year strategic goals for growth and customer satisfaction:
• Provide the number one rated system in each of the markets we participate in, as assessed by
independent customer satisfaction surveys.
• Grow sales across products by 10 percent year after year and profit by 12 percent year after year.
3.1 Project Overview
The redesign of the ABC MedTech platform will expand the type of tests that can be conducted, the
accuracy of the tests, and the speed in providing results to cardiologists. The ABC MedTech platform builds
upon the technology pioneered in the old platform introduced in 2001 but adds key features:
• New sensors: Using our patented algorithm for sound isolation, these new sensors will improve noise
isolation, enhancing the accuracy and speed of echocardiogram results. The improved sensors also
enable the platform to spot previously undetectable conditions, including abnormal communications
between left and right sides of the heart and blood leaking through the valves.
• Data processing capabilities: In the past ten years, data processing capabilities have improved by
several orders of magnitude. The new platform will use the latest capability to increase data resolution
by 150 percent and enhance monitors to display real-time results to cardiologists (currently this is done
in a post-processing mode).
• Improved umbilical cord: The improved umbilical cord developed for the PMJ 1400 system will be
adapted to this platform.
• Multiple USB data ports: Data ports will be added to the platform to facilitate data download and to
improve the ability to run remote diagnostics while the system is being serviced. This will reduce
complaints about system downtime and improve customer satisfaction.
The above upgrades will make this platform the most powerful cardio ultrasound equipment on the market,
surpassing Eon’s and Millennia’s current offerings.
ABC MedTech Case
6
HBR Tools for Building Your Business Case
2
Business Need—Opportunity Statement
Establish a sense of urgency for the
opportunity or solution.
• Describe why you’re proposing the project—what is the
business need?
• Share data that conveys urgency.
READ MORE
HBR Guide to Building Your
Business Case
Chapter 5: Clarify the Need
• If the case is focused on a problem (rather than an
opportunity), it’s critical to articulate your understanding
of the underlying issue using data and analysis. If your
stakeholders don’t understand or don’t agree with your
articulation of the problem, they’re going to take issue with
everything else in your business case. See the XYZ Energy
Case for another example of a business need analysis.
ABC MedTech Case
7
BUSINESS NEED—FIT WITH STRATEGY
2.1 Business Need—Opportunity Statement
There is increasing demand in the U.S. for noninvasive diagnostic health-care equipment because of
the aging of the population and the high cost of surgery. As the incidence of heart disease continues
to rise, the market for cardio ultrasound equipment is expanding. Our primary product in this area, the
ABC MedTech platform, was introduced in 2001 and quickly dominated the market, commanding
virtually 100 percent of the market share. However, Millennia Tech and Eon Health entered the
market in 2008 and 2009 with enhanced products using state-of-the-art technology that surpassed
our product’s capabilities. The current system’s market share is at 52 percent and falling. We stand to
lose significant revenue as customers continue to defect to Millennia and Eon.
Cardiologists, the primary customer for cardio ultrasound equipment, are requesting better and faster
analytics and are willing to pay a higher price for a platform that meets these demands. Our sales
team has confirmed several target customers interested in, and willing to purchase, an upgraded
platform.
2.2 Business Need—Fit with Strategy
This project is aligned with our five-year strategic goals for growth and customer satisfaction:
• Provide the number one rated system in each of the markets we participate in, as assessed by
independent customer satisfaction surveys.
• Grow sales across products by 10 percent year after year and profit by 12 percent year after year.
3.1 Project Overview
The redesign of the ABC MedTech platform will expand the type of tests that can be conducted, the
accuracy of the tests, and the speed in providing results to cardiologists. The ABC MedTech platform builds
upon the technology pioneered in the old platform introduced in 2001 but adds key features:
• New sensors: Using our patented algorithm for sound isolation, these new sensors will improve noise
isolation, enhancing the accuracy and speed of echocardiogram results. The improved sensors also
enable the platform to spot previously undetectable conditions, including abnormal communications
between left and right sides of the heart and blood leaking through the valves.
• Data processing capabilities: In the past ten years, data processing capabilities have improved by
several orders of magnitude. The new platform will use the latest capability to increase data resolution
by 150 percent and enhance monitors to display real-time results to cardiologists (currently this is done
in a post-processing mode).
• Improved umbilical cord: The improved umbilical cord developed for the PMJ 1400 system will be
adapted to this platform.
• Multiple USB data ports: Data ports will be added to the platform to facilitate data download and to
improve the ability to run remote diagnostics while the system is being serviced. This will reduce
complaints about system downtime and improve customer satisfaction.
The above upgrades will make this platform the most powerful cardio ultrasound equipment on the market,
surpassing Eon’s and Millennia’s current offerings.
ABC MedTech Case
8
HBR Tools for Building Your Business Case
2
Business Need—Fit with Strategy
Explain how the project is connected to the
company’s objectives.
• Explicitly connect the need to the company’s strategic goals.
• Whenever possible, list specific goals using the company’s
agreed-upon language.
READ MORE
HBR Guide to Building Your
Business Case
Chapter 5: Clarify the Need
ABC MedTech Case
9
PROJECT OVERVIEW
2.1 Business Need—Opportunity Statement
There is increasing demand in the U.S. for noninvasive diagnostic health-care equipment because of
the aging of the population and the high cost of surgery. As the incidence of heart disease continues
to rise, the market for cardio ultrasound equipment is expanding. Our primary product in this area, the
ABC MedTech platform, was introduced in 2001 and quickly dominated the market, commanding
virtually 100 percent of the market share. However, Millennia Tech and Eon Health entered the
market in 2008 and 2009 with enhanced products using state-of-the-art technology that surpassed
our product’s capabilities. The current system’s market share is at 52 percent and falling. We stand to
lose significant revenue as customers continue to defect to Millennia and Eon.
Cardiologists, the primary customer for cardio ultrasound equipment, are requesting better and faster
analytics and are willing to pay a higher price for a platform that meets these demands. Our sales
team has confirmed several target customers interested in, and willing to purchase, an upgraded
platform.
2.2 Business Need—Fit with Strategy
This project is aligned with our five-year strategic goals for growth and customer satisfaction:
• Provide the number one rated system in each of the markets we participate in, as assessed by
independent customer satisfaction surveys.
• Grow sales across products by 10 percent year after year and profit by 12 percent year after year.
3.1 Project Overview
The redesign of the ABC MedTech platform will expand the type of tests that can be conducted, the
accuracy of the tests, and the speed in providing results to cardiologists. The ABC MedTech platform builds
upon the technology pioneered in the old platform introduced in 2001 but adds key features:
• New sensors: Using our patented algorithm for sound isolation, these new sensors will improve noise
isolation, enhancing the accuracy and speed of echocardiogram results. The improved sensors also
enable the platform to spot previously undetectable conditions, including abnormal communications
between left and right sides of the heart and blood leaking through the valves.
• Data processing capabilities: In the past ten years, data processing capabilities have improved by
several orders of magnitude. The new platform will use the latest capability to increase data resolution
by 150 percent and enhance monitors to display real-time results to cardiologists (currently this is done
in a post-processing mode).
• Improved umbilical cord: The improved umbilical cord developed for the PMJ 1400 system will be
adapted to this platform.
• Multiple USB data ports: Data ports will be added to the platform to facilitate data download and to
improve the ability to run remote diagnostics while the system is being serviced. This will reduce
complaints about system downtime and improve customer satisfaction.
The above upgrades will make this platform the most powerful cardio ultrasound equipment on the market,
surpassing Eon’s and Millennia’s current offerings.
ABC MedTech Case
10 HBR Tools for Building Your Business Case
2
Project Overview
Help stakeholders understand the scope of
your proposed project.
• Provide a high-level description of the solution(s).
• If it’s a new product or an upgrade to an existing product,
like this one, lay out the general concept, and explain how it
fits in with existing offerings.
READ MORE
HBR Guide to Building Your
Business Case
Chapter 7: Consider Alternatives
Chapter 13: Prepare Your
Document or Slides
• For a facility project, describe its magnitude, and name the
systems affected.
• For a productivity initiative (such as an IT project that allows
customer service to handle incoming calls faster), specify
which business processes it will affect and which costs it will
eliminate or reduce.
• If you’re including more than one option, highlight key
differences so that stakeholders can quickly compare.
ABC MedTech Case
11
SCHEDULE
4.1 Schedule
Project duration: (project start through completion)
0–6 months
6–12 months
12–18 months
18–24 months
> 24 months
Key Milestones:
5/30/2012
Test prototype integration
7/15/2012
Freeze design
11/20/2012
Complete qualification test
12/20/2012
Complete pilot run
1/15/2013
Launch product
4.2 Team
Number of full-time employees (FTEs) required for project:
1–3
3–6
6–9
9–15
> 15
FTEs by function:
8
R&D
1
Quality
1
Manufacturing
1
Marketing
0.5
Purchasing
0.25
Finance
0.25
IT
Subject matter experts (SMEs) and competencies critical to the project:
Team leader
Ben Buchanan
Acoustics SME
Carl Hayes
Data Processing SME
Debra Wilson
Quality SME
Gloria Hermoz
ABC MedTech Case
12
HBR Tools for Building Your Business Case
3
Schedule
Lay out a high-level plan for implementing
the project.
• Explain how long the project will take, and list any key
milestones or major deliverables.
• There are almost always risks to a project schedule. You can
include them here and/or in your “Risks” section.
READ MORE
HBR Guide to Building Your
Business Case
Chapter 8: Think Through the
“How” at a High Level
Chapter 11: Account for Risks
Section: Consider the Risks
ABC MedTech Case
13
TEAM
4.1 Schedule
Project duration: (project start through completion)
0–6 months
6–12 months
12–18 months
18–24 months
> 24 months
Key Milestones:
5/30/2012
Test prototype integration
7/15/2012
Freeze design
11/20/2012
Complete qualification test
12/20/2012
Complete pilot run
1/15/2013
Launch product
4.2 Team
Number of full-time employees (FTEs) required for project:
1–3
3–6
6–9
9–15
> 15
FTEs by function:
8
R&D
1
Quality
1
Manufacturing
1
Marketing
0.5
Purchasing
0.25
Finance
0.25
IT
Subject matter experts (SMEs) and competencies critical to the project:
Team leader
Ben Buchanan
Acoustics SME
Carl Hayes
Data Processing SME
Debra Wilson
Quality SME
Gloria Hermoz
ABC MedTech Case
14
HBR Tools for Building Your Business Case
3
Team
Identify the team required to make the
project a success.
• List the total number of necessary full-time employees
(FTEs) and core team members (by name or function).
• Include subject matter experts (SMEs) who will need to
contribute to the project.
READ MORE
HBR Guide to Building Your
Business Case
Chapter 8: Think Through the
“How” at a High Level
ABC MedTech Case
15
OTHER RESOURCES
4.3 Other Resources
Special tools/equipment and resources:
We will conduct a pilot run in the South Carolina operations facility during December 2012. We will set up
the new production line adjacent to the existing production line. Space is available since volume has
dropped.
Facilities needed (space, labs, etc.):
We will need access to the South Carolina facility from September through December for production line
setup, checkout, and pilot run.
5.1 Impact
When we launch the new platform in 2013, we project sales of $750,000.* This will cannibalize sales of the
current ABC MedTech system, but the net will be $690,000. We estimate sales will rise to $1,050,000 by
2014 and stay at that annual rate through 2016. By 2016, we project regaining 85 percent market share.
*All projections per Anna and Steven in Sales.
6.1 Risks
Key risks include:
• Competition (high): We anticipate that Millennia Tech and Eon Health will introduce upgraded
products in response to the new product within two or three years. Since we own the patent on the
noise reduction sensors, Millennia and Eon won’t be able to fully emulate the new platform’s detection
capability, but they may cut into our anticipated market share. This poses no risk to the project cost or
schedule, but it may affect the benefits—positively or negatively—depending on how long it takes
Millennia and Eon to respond.
• Personnel (moderate): The redesign is highly dependent on the SMEs listed above. If any of them
leave the company or are pulled into other projects, they would need to be replaced with personnel with
the same level of expertise. This turnover would delay the design and development phase of the project
and increase costs.
• Cost overrun (moderate): The largest risk to the cost of the project is in the testing phase. If there are
unanticipated bugs, we may have to pay for several additional rounds of testing, at $100,000 per retest.
• Schedule (low): Engineering has confirmed that the upgrade will take no longer than six months. Each
phase of this timeline includes an extra five days for unforeseen delays.
• Technology (low): The platform will leverage mostly proven technologies. The one new technology is
the noise isolation sensors. They’ve been tested and demonstrated in the R&D lab with the old ABC
MedTech system but have yet to be incorporated into a publicly available product.
ABC MedTech Case
16
HBR Tools for Building Your Business Case
4
Other Resources
Identify any additional resources the project
will need.
• Explain any special resources—technology, equipment,
facilities, access to locations—required for the project.
• Whenever possible, include how long you’ll need the
resources for (and be sure to account for any costs in your
calculations).
READ MORE
HBR Guide to Building Your
Business Case
Chapter 8: Think Through the
“How” at a High Level
ABC MedTech Case
17
IMPACT
4.3 Other Resources
Special tools/equipment and resources:
We will conduct a pilot run in the South Carolina operations facility during December 2012. We will set up
the new production line adjacent to the existing production line. Space is available since volume has
dropped.
Facilities needed (space, labs, etc.):
We will need access to the South Carolina facility from September through December for production line
setup, checkout, and pilot run.
5.1 Impact
When we launch the new platform in 2013, we project sales of $750,000.* This will cannibalize sales of the
current ABC MedTech system, but the net will be $690,000. We estimate sales will rise to $1,050,000 by
2014 and stay at that annual rate through 2016. By 2016, we project regaining 85 percent market share.
*All projections per Anna and Steven in Sales.
6.1 Risks
Key risks include:
• Competition (high): We anticipate that Millennia Tech and Eon Health will introduce upgraded
products in response to the new product within two or three years. Since we own the patent on the
noise reduction sensors, Millennia and Eon won’t be able to fully emulate the new platform’s detection
capability, but they may cut into our anticipated market share. This poses no risk to the project cost or
schedule, but it may affect the benefits—positively or negatively—depending on how long it takes
Millennia and Eon to respond.
• Personnel (moderate): The redesign is highly dependent on the SMEs listed above. If any of them
leave the company or are pulled into other projects, they would need to be replaced with personnel with
the same level of expertise. This turnover would delay the design and development phase of the project
and increase costs.
• Cost overrun (moderate): The largest risk to the cost of the project is in the testing phase. If there are
unanticipated bugs, we may have to pay for several additional rounds of testing, at $100,000 per retest.
• Schedule (low): Engineering has confirmed that the upgrade will take no longer than six months. Each
phase of this timeline includes an extra five days for unforeseen delays.
• Technology (low): The platform will leverage mostly proven technologies. The one new technology is
the noise isolation sensors. They’ve been tested and demonstrated in the R&D lab with the old ABC
MedTech system but have yet to be incorporated into a publicly available product.
ABC MedTech Case
18
HBR Tools for Building Your Business Case
4
Impact
Highlight the benefits of the project.
• Describe the benefits. Benefits mainly consist of revenue and
productivity savings (benefits you’ll achieve through greater
efficiency). In this example, the benefits are the revenue
gained by launching the upgraded product.
• In this section, you only present the benefits. You’ll address
costs below. Your final ROI calculation will take both costs
and benefits into account.
READ MORE
HBR Guide to Building Your
Business Case
Chapter 9: Estimate Costs
and Benefits
Section: Benefits
• Only include benefits that you can quantify. Define the
impact as precisely as you can. You may mention additional
intangible benefits, such as improved morale or increased
customer satisfaction, but stakeholders will want to know the
financial impact.
• Be clear about where these numbers come from—did you
get them from colleagues in Finance, Sales and Marketing,
Engineering? Stakeholders care about the sources for these
assumptions and are more likely to trust your numbers if the
information comes from people they trust.
ABC MedTech Case
19
RISKS
4.3 Other Resources
Special tools/equipment and resources:
We will conduct a pilot run in the South Carolina operations facility during December 2012. We will set up
the new production line adjacent to the existing production line. Space is available since volume has
dropped.
Facilities needed (space, labs, etc.):
We will need access to the South Carolina facility from September through December for production line
setup, checkout, and pilot run.
5.1 Impact
When we launch the new platform in 2013, we project sales of $750,000.* This will cannibalize sales of the
current ABC MedTech system, but the net will be $690,000. We estimate sales will rise to $1,050,000 by
2014 and stay at that annual rate through 2016. By 2016, we project regaining 85 percent market share.
*All projections per Anna and Steven in Sales.
6.1 Risks
Key risks include:
• Competition (high): We anticipate that Millennia Tech and Eon Health will introduce upgraded
products in response to the new product within two or three years. Since we own the patent on the
noise reduction sensors, Millennia and Eon won’t be able to fully emulate the new platform’s detection
capability, but they may cut into our anticipated market share. This poses no risk to the project cost or
schedule, but it may affect the benefits—positively or negatively—depending on how long it takes
Millennia and Eon to respond.
• Personnel (moderate): The redesign is highly dependent on the SMEs listed above. If any of them
leave the company or are pulled into other projects, they would need to be replaced with personnel with
the same level of expertise. This turnover would delay the design and development phase of the project
and increase costs.
• Cost overrun (moderate): The largest risk to the cost of the project is in the testing phase. If there are
unanticipated bugs, we may have to pay for several additional rounds of testing, at $100,000 per retest.
• Schedule (low): Engineering has confirmed that the upgrade will take no longer than six months. Each
phase of this timeline includes an extra five days for unforeseen delays.
• Technology (low): The platform will leverage mostly proven technologies. The one new technology is
the noise isolation sensors. They’ve been tested and demonstrated in the R&D lab with the old ABC
MedTech system but have yet to be incorporated into a publicly available product.
ABC MedTech Case
20 HBR Tools for Building Your Business Case
4
Risks
Highlight the key risks to the project.
• Explain what might not go as planned—whether positive
or negative. Most people focus on threats (e.g., What if the
vendor doesn’t deliver on time? What if the cost of raw
materials goes through the roof?). But you need to consider
opportunities as well (How can you get a higher NPV or a
faster payback? Can you complete the project sooner?).
READ MORE
HBR Guide to Building Your
Business Case
Chapter 11: Account for Risks
• Identify the likelihood of the risks: high, moderate, low.
• If there are no major risks, say so. But make clear that you’ve
thought through the possibilities.
• The primary risks you’ll want to consider are to costs
and schedule. But you may also want to think about the
following:
Personnel: What if the person running this project leaves
the company? What if you don’t get all the team members
you requested?
Technology: What if you encounter bugs when testing?
What if employees struggle to adapt to the new system?
Scope: What if the project needs to include more (or
fewer) geographic regions, employees, or customers?
What if the stakeholders change requirements?
Quality/performance: What if the product doesn’t perform
as you expect it to—for better or worse? What if quality
suffers because of a tight schedule?
ABC MedTech Case
21
FINANCIALS
7.1 Financials
ROI Calculation:
The NPV is $2.1 million over six years. See below for additional detail.
8.1 SIGNATURE APPROVAL TO INITIATE
Originator:
ALAN ADAMS
Alan Adams
4/20/2012
Print Name
Signature
Date
Print Name
Signature
Date
Print Name
Signature
Date
Signature
Date
Project Review Approval:
Project Sponsor:
Print Name
ABC MedTech Case
22
HBR Tools for Building Your Business Case
5
Financials
Lay out the financials of your project,
highlighting the ROI.
• Include the total costs and benefits of your project. It’s not
necessary to go into detail on specific figures unless there are
unusual expenses that require explanation.
• Show the results of your ROI calculation, using your
company’s preferred method.
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HBR Guide to Building Your
Business Case
Chapter 10: Calculate ROI
• In this example, stakeholders were most concerned with
NPV, so that is what’s included.
• If your company doesn’t have a preferred ROI type, use the
one most appropriate to your project—breakeven analysis,
payback period, NPV, or IRR.
• See ABC MedTech ROI for the detail behind these numbers.
ABC MedTech Case
23
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