The business case model is a critical tool used to evaluate opportunities and options. Even a moderate sized business case model can include hundreds of assumptions and thousands of equations used to calculate key metrics such as net present value (NPV) or internal rate of return (IRR). Often the model itself is only fully understood by a few people involved in its development. (And, other times, the model may be a joint effort where no single person actually understands the model in its entirety).
Early in my career I was responsible for developing the Integrated Resource Plan (IRP) for a large investor owned utility. The modeling tool I used would crank out fuel mix numbers, estimated marginal production costs, and thousands of other projections covering the next two decades. A typical run of the model would produce several hundred pages of results that had to be sifted through. The person responsible for consolidating the IRPs from the four sister companies owned by a holding company, gave me a bit of wisdom early on: "The point of the model is not to give you answers, but rather to help you gain insight."
So what is the most important part of the modeling effort? Certainly the results need to be meaningful and reasonably accurate. Sometimes the sensitivity analysis showing which variables have the most significant impact is valuable. But with several recent business case efforts, I have seen instances where there was significant, unexpected value in the data gathering process itself.
Some view data gathering as a way to "fill in the blanks" scattered across their spreadsheet. That kind of thinking can miss an important and significant opportunity.
The data gathering process can be used to build awareness of what is being considered. When properly facilitated, this process can also help build additional consensus with key stakeholders. Asking for numbers is not always enough. Sometimes it helps to ask a broad range of people across a company if you are asking for the right numbers. By soliciting input beyond what you need to complete your spreadsheet, you sometimes gain insight into the areas where "you don't know what you don't know."
You have to be willing to walk away from some of those meetings with both the information to help fill in a few gaps in the business case model and the unsettling awareness that the model also needs some additional modifications you were not previously aware of.
The team at West Monroe Partners frequently helps clients with complex business cases. Our ability to turn the data gathering effort into something more valuable through active listening, cross pollination of ideas around an organization, and working to build consensus helps us provide additional value as part of a process that others may simply view as a necessary evil.
If you are preparing for a business case effort, let us help ensure that you have more than a bunch of numbers when the process is finished.