Q: What exactly is a business case?

A: The business case is a decision support and planning tool that projects financial results and other business consequences. It can be likened to a scientific research report, requiring not only presentation of the results but the methods, data and analysis behind the results. The business case is not an accounting statement, business plan or model, it deals with assumptions, arbitrary judgments and new data.

Q: What is the difference between a business case and a business plan?

A: In essence the business case is the result and consequences of a single action or decision, whilst the business plan is structured around the whole organization. Both tools play a role in decision support and business planning as well as providing mutual support to one another.

Q: Why do we need a business case?

A: The network operators decision to purchase technology is increasingly becoming a business decision. Operators stock market listing, increased focus on ROI, investment cost and payback are drivers and key metrics for evaluating and justifying purchasing decisions. The business case provides vendors with the necessary response by establishing business value in solutions for overcoming economic arguments and justifying investment decisions.

Q: Why do business cases fail?

A: There are three main reasons why a business cases fails. The case is not believable - its fails to gain credibility; the case does not predict accurately; and the case fails to provide confidence to decision makers and business planers.

Q: What are the key success factors for building the business case?

A: Recruiting the right team is seen as the first critical step; Having a proven process for case design, analysis and presentation complete with a comprehensive risk and sensitivity analysis are all essential success factors for building credibility and confidence into the case.

Q: What are the key financial metrics in the business case for decision-making?

A: Every business case is different however most cases require the presentation of financial matrices such as: Total cash flows, Net Present Value (NPV), Payback period, Return on Investment (ROI), Internal Rate of Return (IRR) . In the case of network operators other key metrics such as market share, ARPU, subscriber acquisition cost, 3G licensing cost per sub are also often developed.

Q: What are risk and sensitivity analysis and what are their value?

A: All business cases are built on a foundation of assumptions because they project into the future. How solid and credible that foundation is can be measured and determined by a risk and sensitivity analysis. The sensitivity analysis identifies which assumptions in the business case have a strong influence in determining the results whilst the risk analysis identifies the probability of the results and the likelihood of other results occurring (the spread of results). A comprehensive risk and sensitivity analysis is essential for building credibility and confidence into the case.

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