The document provides guidance on developing a business case for large investment requests. It recommends establishing context, opportunities, benefits and stakeholders. The strategic approach and metrics to measure success should then be selected according to the organization's value model. Performance baselines can be set to quantify targeted improvements. Financial impacts are connected to improvements and ROI is calculated. A timeline estimates steps will take 6-12 weeks. Metrics may include sales effectiveness, product development effectiveness and customer responsiveness aggregates. Establishing baselines and selecting sub-initiatives to support targeted improvements is also recommended.

1. Business Case Development Workshop
Quantifying Business Outcomes For Large Investment Requests
Author:
Alfred Carroll
Data and Analytics Executive
October 2019

2. Overview of Business Case Approach
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2

3. Business Case Development Approach
The following approach is recommended as a framework for producing
detailed businesses cases for large initiatives requiring senior leadership
approval and funding. Some steps may be accelerated or removed based
on culture, climate, timing, and expectations of the audience of decision
makers.
The following steps are drawn from best practices:
1. Identify Context (including Stakeholders), Opportunities/Challenges and
Benefits
• Optionally discuss risks of alternatives
2. Strategic Approach to meet those Opportunities and Challenges
3. Select Metrics according to your organizations Value Model (explicit or
inferred) to support approach
4. Optionally establish a Performance Baseline if possible/applicable
5. Select and highlight targeted improvements, ideally measured by selected
metrics
6. Connect Targeted Improvements to Financial Results
7. Cost Models
8. Calculate ROI
9. Evidence
3

4. A Reference Timeline and RACI for Business Case Completion
4
Step Calendar
Time Estimate
Business Finance IT
Identify Context (including Stakeholders),
Opportunities/Challenges and Benefits
2 weeks Responsible Consulted
Strategic Approach 2 weeks Accountable Responsible
Select Metrics 1 week Consulted Consulted
Establish a Performance Baseline 2 weeks Consulted
Select and highlight targeted improvements 2 weeks Accountable
Responsible
Responsible
Connect Targeted Improvements to Financials 1 week Responsible Consulted
Cost Models 2 weeks Responsible
Calculate ROI 1 week Responsible Consulted
Evidence Variable and
throughout
Responsible Consulted
• Assumes significant IT Component and Complexity and minimal pre-work completed.
• Very rough timeline estimates for business case development based on general project experience are
provided for reference only. This can often be accelerated based on the pursuit team or prior work done.
• If all steps are completed from scratch this process may take roughly 6-12 weeks with some overlaps in activity.

5. Identify Vision, Stakeholders,
Opportunities and Challenges
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5

6. Identify Vision, Stakeholders, Opportunities and
Challenges
• Typically this section is not “from scratch”. There will be requests,
perhaps a demand management system entry, and notes from prior
meetings which at least give a clue to potential vision, stakeholders
for the initiative and outline the challenge.
• If this is a broad initiative with many parties, attempt to aggregate
issues into issue categories.
• Talents required will be depend on the type of initiative but may
include functional/technical business analysts, enterprise architects,
financial planners, information technologists and others.
• Bullet points should be streamlined to the most critical factors
6
Checklist for this step:
❑ Summarize issue trees
❑ Validate scope and aligned business request set
❑ Validate and complete stakeholder matrix
❑ Identify Business Case Authors and Supporting Teams who will provide
input

7. Scope
• A scope statement should clearly identify subject areas, and related
issue trees linked to business requests.
• Where such requests are well defined, include details on what will be
delivered
• Where requests or solution paths are ambiguous, be clear on what
discovery activities are included in scope and within what time
boxes.
• If there is appetite for an Agile approach then state how agile
methods will be leveraged for ambiguous components.
• Show clarity on business and technical owners of any proposed
solutions and/or discovery efforts.
• The business case should include at least some concrete solutions
approaches were value can either be quantified or checked off as a
binary, such as close a compliance exposure.
7

8. Strategic Approach
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8

9. Strategic Solution Approach
• Ideally your organization will have identified general strategies and value models which
this potential effort can be tied to.
• Create 1-2 slides max on conceptual architecture and solution components if the
audience is senior leadership. Additional details may be required for mid level
functional/technical audiences. Summarize as much as is reasonably possible as
executive attention will be limited. (Example 1 pager below)
9
TO DO:
❑ Create a conceptual solution architecture or “marketechture” suitable for audience
❑ Be prepared to describe the major conceptual components
❑ Understand back of napkin typical costs for such components and the vendor landscape (IT and
Procurement can often help here)
Drivers
• Focus on Customer Delight
• Data Quality Issues
• Labor intensive work arounds for Sales,
Commercial Ops, Sales Admin
• Uncollected revenue due to
entitlement ambiguity
• ……
Challenges / Initiatives
• Customer Ontology
• Customer 360
• Strengthen Product Master
• Reduce Data Management Costs
Outcomes
• Single view of the customer across all
our products and services within 12
months
• Target products and bundles to
customers based on their needs and
risks for top 10%
• Flexible product development, highly
responsive to customer needs; all new
products developed with customers
Success Measures
• Operating Costs Reduced by 5%
• Revenue Increased by 4%
• Salesforce Productivity Improvements of
20%
Data Governance
Data Integrity (MDM, DQ, Reference Data)
Data Lakes, Hubs, Warehouses Data Orchestration and Integration
Data Discovery
Analytics
Initial Capabilities Focus

10. 10
Create Deliverables List and Roadmap
SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUGTO DO:
❑ Create a
clear list of
deliverables
tied to
business
outcomes
❑ Identify
dependenci
es and rough
timing on a
roadmap
with a
reasonable
time window

11. Select Metrics according to
Clarivate Value Model to support
approach
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11

12. Select Metrics according to Value Model
12
• What measurable value gains are we asserting this initiative will yield?
• Use Clarivate’s Value Map whether explicitly shared by leadership or
inferred to select common business metrics from the top down.
• We don’t need the universe of possible metrics or even as many as
are included in the sample below (slides 15-18 excerpts from Gartner
Value Model) but several meaningful metrics will add clarity to value
demonstration.
TO DO:
❑ Determine among business and IT Leadership, which metrics leadership
needs to see to make a funding decision or if metrics can be skipped
and we should proceed to ROI and Cost Models.
❑ If the directional alignment is that metrics are applicable determine
which specifically and then plan how we can baseline and capture.

13. Mapping Benefit Categories to Business Metrics
Supply
Management
Demand
Management
Customer
Responsiveness
Sales
Effectiveness
Market
Responsiveness
Product Development
Effectiveness
Supplier
Effectiveness
Operational
Efficiency
On-Time
Delivery
Service
Accuracy
Agreement
Effectiveness
Target Market
Index
Product Portfolio
Index
Sales Opportunity
Index
Sales Price
Index
Customer
Retention Index
Market Coverage
Index
Market Share
Index
Configurability
Index
Channel
Profitability Index
Opportunity/Threat
Index
Cost-of-Sales
Index
Sales Cycle
Index
Forecast
Accuracy
Sales Close
Index
New Products
Index
Feature Function
Index
Time-to-Market
Index
R&D Success
Index
Service
Performance
Order Fill
Rate
Material
Quality
Customer Care
Performance
Transformation
Ratio
Supplier On-Time
Delivery
Supplier Service
Performance
Supplier Order
Fill Rate
Supplier Care
Performance
Supplier Material
Quality
Supplier Service
Accuracy
Supplier Trans-
formation Ratio
Supplier Agreement
Effectiveness
Cash-to-Cash
Cycle Time
Conversion
Cost
Asset
Utilization
Sigma
Value
Customer Data Quality Product Data Quality
Example Mapping:
• Master Data Management Improvements in Customer and
Product Data support Customer Retention.
• A 10% increase in Customer Data Quality = 1% increase in
customer retention

14. Example Market Responsiveness Metric Aggregates
Suggested Master Data
Domain
Primes/Definition Calculation Application for Use Financial Outcome
Product/Service Product Portfolio Index
Identifies and validates
current and projected
customer needs in existing
and targeted markets. This
metric shows the product
portfolio by size and margin
contribution. The underlying
assumption is that high-
margin products serve
customer needs better than
low-margin products, and
that high growth rates
indicate that customer
needs are being met. The
index combines these
factors to create a metric
that shows a company's
ability to serve customer
needs compared to industry
peers.
Sum {revenue of products where
[(g > G/2) and (m > M/2)]} / sum
{revenue of all products}, where
G = product with highest growth
rate, g = growth rate of each
individual product, M = product
with highest gross margin and m
= gross margin of each individual
product
Adjusted quarterly, this
measure is an indication of
the organization's ability to
determine accurately the
changing demands of
current and potential
customers. Growth and
income are what investors
look for in organizations.
The income statement
account most affected by
the Product Portfolio Index is
gross profit.
Gross Profit
Product/Service,
Hierarchy
Configurability Index
Shows the company's ability
to identify and satisfy the
specific needs of customers
in current and targeted
markets.
Sum of revenue from product
options / total company revenue
Mass-customization has
become an effective
marketing approach to
aligning an organization's
products and services with
the needs of the customers
it serves. The income
statement account most
affected by the
Configurability Index is
revenue.
Revenue

15. Example Sales Effectiveness Metrics Aggregate
Suggested Master Data
Domain
Primes/Definition Calculation Application for Use Financial
Outcome
Contact, Prospect, Customer Sales Opportunity Index
Shows how successfully the
organization can cultivate prospects
for its products and services.
Contacts by prospects last month / 2 x (12-
month rolling average prospect contacts
per month)
The Sales Opportunity Index is a leading indicator of
the level of demand for the company's products and
services, and is typically updated monthly. The
income statement account most affected by Sales
Opportunity Index is revenue.
Revenue
Prospect, Customer,
Organization
Sales Cycle Index
Shows the ability of the sales function
to manage the duration of the sales
process.
A formal sales tracking process is required
to record when initial contacts with
prospects are made, as well as the sales
close date (whether successful or
unsuccessful). Sales Cycle Index = average
monthly duration (in calendar days)
between these dates
The Sales Cycle Index is a leading indicator of the
level of demand for the products and services offered
by the organization. The income statement account
most affected by the Sales Cycle Index is revenue.
Revenue
Prospect, Customer,
Organization, Hierarchy
Sales Close Index
Shows how successfully the sales
function can turn prospects into
customers.
Successful prospect sales decisions / total
prospect sales decisions
The Sales Close Index is a leading indicator of the level
of demand for the products and services offered by
the organization. The income statement account most
affected by Sales Close Index is revenue.
Revenue
Product/Service, Organization Sales Price Index
Shows how successfully the sales
function can close business without
dropping price and, therefore,
margin.
1 – (total discount revenue / total list price
revenue), where "list price" indicates what
the revenue would have been if sold
without a discount
The Sales Price Index is a leading indicator of the level
of demand for the organization's products and
services. The income statement account most
affected by the Sales Price Index is gross profit.
Gross Profit
Product/Service, Organization,
Location, Hierarchy
Forecast Accuracy Index
Shows the ability of the sales function
to accurately predict the demand
for the organization's products and
services.
Total weekly forecast items within +/- 10% of
actual / total weekly forecast items
Forecast Accuracy is perhaps the single most
important influence on operational efficiency. The
income statement account most affected by
Forecast Accuracy is operating expense.
Working Capital
Customer, Organization,
Location, Hierarchy
Customer Retention Index
Shows how well existing customer
needs are being identified and
satisfied.
1 – (existing customers with no purchase in
buying cycle) / total customer count
A higher index demonstrates the organization's ability
to satisfy existing customer needs, measured by their
desire to purchase more products or services. It is
cheaper to retain a customer than to acquire a new
one. The income statement account most affected
by the Customer Retention Index is revenue.
Revenue

16. Example Product Development Effectiveness Metrics
Aggregate
Suggested Master Data
Domain
Primes/Definition Calculation Application for Use Financial
Outcome
Product/Service,
Hierarchy
New Products Index
Shows the organization's
emphasis on adapting its
products and services.
Revenue of products and services
released in past 12 months / total
company revenue
Research shows that a correlation exists
between the revenue from new products
and company stock price. The income
statement account most affected by the
New Products Index is revenue.
Revenue
Product/Service,
Hierarchy
Feature Function Index
Shows the level and extent
of the changes found in new
products and services
offered by the organization.
New component items for
products released last year / total
component items for those
products; where new component
items have been added
specifically for products released
to market during the past 12
months, and, for services,
component items are substituted
by skill sets.
New products can range from simple
packaging changes to completely
different new products. The Feature
Function Index measures where the
organization's new products fit within this
range. The income statement accounts
most affected by the Feature Function
Index are revenue and operating
expense.
Working Capital
Product/Service,
Organization, Channel,
Hierarchy
Time-to-Market Index
Shows the ability of the
product development
function to release new
products and services on a
timely basis.
Average (time from approval to
launch for each product)
Research shows that a correlation exists
between the revenue from new products
and company stock price. The income
statement account most affected by the
Time-to-Market Index is revenue.
Revenue
Product/Service,
Hierarchy
R&D Success Index
Shows the ability of the
product development
function to bring new
products and services to
market.
New products launched in past 12
months / development projects
due to complete in past 12
months
Research shows that a correlation exists
between the revenue from new products
and company stock price. The income
statement account most affected by the
R&D Success Index is revenue.
Revenue

17. Example Customer Responsiveness Effectiveness Metrics
Aggregate
Suggested Master Data
Domain
Primes/Definition Calculation Application for Use Financial
Outcome
Product/Service,
Customer, Organization,
Location
On-Time Delivery
Shows the ability of the
organization to meet
customer expectations with
respect to the time it takes
to satisfy a specific order or
service request. On-Time
Delivery is based on the
customer request date, not
a negotiated date.
Order delivered on time / total
orders received. The calculation is
performed on a seven-day, rolling
average basis.
On-Time Delivery is particularly important
for organizations that supply corporate
customers, since these customers try to
manage inventory levels by controlling
the timing of material receipts. The
income statement accounts most
affected by On-Time Delivery are revenue
and operating expense.
Revenue and
Working Capital
Customer, Service,
Organization, Location
Service Accuracy
Measures the availability
and accuracy of the
information needed to
complete a specific order.
This information includes
web-based order fulfillment,
electronic data interchange
information and shipment
documentation.
Orders completed with correct
information / total orders
processed
Customers demand available and
accurate information to complete their
purchase transactions. This is growing
increasingly complex as sales coverage is
broadened throughout the Internet. The
income statement accounts most
affected by Service Accuracy are
revenue and operating expense.
Revenue and
Working Capital
Customer, Organization,
Location
Agreement Effectiveness
Measures the overall
effectiveness of SLAs in
place with the organization's
customers. Quarterly surveys
are recommended to
determine the effectiveness
of these SLAs. The surveys
must be completed by the
end users of the service the
SLAs are measuring.
Existing customers with 90% or
better SLA satisfaction / total
number of existing customers
SLAs have become the most significant
factor for the success of a maturing
outsourcing relationship. The income
statement accounts most affected by
Agreement Effectiveness are revenue
and operating expense.
Revenue and
Working Capital

18. Establish a Performance Baseline
Then Select Targeted
Improvements to Baseline
Performance Levels
and gain consensus to select which sub-initiatives will
support those improvements
18

19. Performance Baselines
19
• Have measurable business-process-level metrics and establish a
baseline for these metrics before the program starts and improves
conditions.
• This baselining process may be conducted for the first time for some
metrics.
• Actuals can be compared against baseline cyclically.
• It’s also useful to benchmark performance against that of the industry
and best-in-class peer organizations. This provides external reference
points from your competitors, as opposed to taking a purely internal
view.
TO DO:
❑ Determine among business and IT Leadership, reasonable methods for
collecting current values of the metrics identified
❑ Record baseline metric values for later comparison
❑ If available review industry benchmarks for any selected metrics to paint
a wider competitive picture

20. Select Targeted Improvements to Baseline Performance
20
• The business process owners who are responsible for the areas being measured (by the
metrics selected) must accept accountability for targeted improvements arising from this
initiative. These process owners must propose an achievable level of improvement to the
various metrics — for example, specific higher cross-selling or upselling rates.
• Usually, this is an iterative process involving data and analytics teams and the relevant
business stakeholders or process owners.
• We can make preliminary assumptions and estimates then revise them after the step
described in the next section — converting the targeted improvements to baseline
performance levels into financial results.
• With a Data Transformation example, MDM software vendors and MDM external service
providers (ESPs) are providing MDM ROI calculators as presales tools. Such calculators
suggests appropriate metrics, based on a suggested set of areas for improvement, such
as risk and compliance, operational effectiveness, customer-centricity etc. Sample
metrics have also been provided in this guidance document.
• Then, following discussion of the current baseline versus the desired state, and the input of
TCO data, it generates potential ROI data. This data can be useful to inform the
Customer Strategy discussion, although vendors of software and services rarely to commit
contractually to delivering any projected financial gains.
TO DO:
❑ Select which sub-initiatives will be in prioritized as supporting targeted improvements.
❑ Perform mini-discovery (1-2 sessions max) for any requirement which needs clarification to
prioritize and determine synergies
❑ Carefully select the set of requirements and use cases to prioritize. Those that provide the most
value individually and synergistically should float to the top. Communicate where on future
roadmaps other items might fall.
❑ Set realistic improvement goals for a few key metrics if specific metrics have been selected.

21. Connect to Financial Results
and gain consensus to select which sub-initiatives will
support those improvements
21

22. Select which sub-initiatives will support those
improvements
22
• Metric in a Business Value Model could be linked to accounts in the
income statement or balance sheet as financial sensitivity
calculations. Clarivate financial stakeholders may be leveraged to
assist with this task.
TO DO:
❑ Enlist aid from Finance
❑ Assess what reasonable
statement ties can be
drawn to selected metrics

23. Cost Model
23
• Once solution scope is determined and approaches rationalized, backing into cost
models involves estimating components of labor, technology capital, and OPEX.
• Your organization can leverage existing vendor relationships and research sources
such as Gartner to validate market assumptions for each line item
TO DO:
❑ Consensus on high level scope inclusion
❑ Estimate additional costs
❑ If possible, validate internally developed cost estimates with Vendor and through
our pre-paid analysts engagements such as Gartner
❑ Update total ask, potentially with management reserves
❑ Align the TCO model with project phases and milestones, and produce a graphical
display of the costs.
❑ Expect software and ESP vendor proposals and internal staffing decisions to
precede a final TCO calculation.
❑ Expect the TCO model to drive many project decisions (for example, the use of
ESPs, vendor selections, internal staffing scenarios and phasing).

24. ROI
24
TO DO:
❑ Get approval from sponsoring Business Owners and Support Teams (IT and Finance)
on Costs and Cost Models
❑ Get guidance from Leadership and/or Finance on which ROI Calculations are
currently used per policy or leadership direction
❑ Determine required fund allocations over time periods based on typical consulting
engagements and/or internal chargebacks
❑ Complete ROI Spreadsheets (NPV, IRR, etc)
Do the math…
Direct and Indirect Cost and
Cashflow Calculations
(validate your organizations
norms with Finance. There may
be none if this capability is not
advanced)