May 2: Crafting the Business Case

Global Product Management Talk with Nick Coster

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  1. Global Product Management Talk is a weekly virtual twitter chat Mondays
    4-5 PM PST Co-hosts @cindyfsolomon w/Adrienne Tan @brainmates w/Product
    Management evangelist discussing topic & Q&A with transcript
    & blogging follow-up. 
  2. Our speaker, Nick Coster, is a co-founder of brainmates who is passionate about the benefits of putting the customer before the technology and building products and services that delight the buyer and the user. Nick has been developing and managing products for over 13 years.

    In the process of this journey he has developed a deep understanding of the way the different technologies fit together and is always amazed at the new and exciting ways that people use them.

    Nick is also the brainmates in-house Product Management training facilitator. He enjoys bringing together product managers from different industries and working with them to help them deliver “market-driven” product innovation.

    Nick considers himself an athlete having completed 2 full marathons (Sydney Marathon in 2003 and 2004), however in recent times it is fair to say that he is not at his athletic peak.
  3. Background reading: What is a Business Case?
    bit.ly/ggHMSK
  4. Background reading:
    How to Understand and Use Net Present Value in a Business Case bit.ly/guzNHZ

    NPV  (Net Present Value) is the forecast financial outcome of a new product initiative. Calculating it will firstly tell the business if the
    product initiative will return a benefit to the business relative to
    the cost of financing the investment, and secondly the NPV provides a standard yardstick by which to measure one initiative against another.

  5. The product manager's field guide: practical tools, exercises, and resources ... By Linda Gorchels

    passage on Net Present Value and product management
    bit.ly/lgfbrH
  6. Talk focus: the purpose of a Business Case, the process of crafting a Business Case and the role of Product Management to sell the concepts within the Business.

  7. Questions to be discussed:

    Q1 What is the main purpose of the Business Case?
    Q2 Are there any other outcomes that the Business Case addresses?
    Q3 What is Product Managements role in the development of the the Business Case?
    Q4 What information is contained in a Business Case?
    Q5 What is the best way to get started writing the Business Case?
    Q6 What challenges have you experienced in writing a Business Case?
    Q7 What is the best way of delivering the Business Case to stakeholders?
    Q8  What financial measures are used in a Business Case?
    Q9  What do you do if the Business Case is not attractive?
    Q10 What is the Business Case used for after it has been completed?

  8. Acronymns mentioned during talk:

    BC = Business Case

    PLC = Product Life Cycle

    GTM = Go to Market

    PLC = Product Life Cycle

    MRD = Marketing Requirements Document

    LOI = Letter of Intent

    VOC = Voice of Customer

    VOM = Voice of Market

    NPV = Net Present Value

    IRR = Internal Rate of Return

    db = data base

    OTW = Off the Wall or odd, bizarre, weird

  9. Q1 What is the main purpose of the Business Case?

  10. Macmyday A1 Outlining the background, drivers, path to achievement, revenue & cost expectations 


    KirstenLester A1: For justification, prioritization, visibility = reasons for biz case

    gander2112  A1: A BC is a document that identifies an opportunity, and a plan for attack.

    bdoctor  A1. to prioritize the investments

    nickcoster A1) The purpose of the business case is to faciliate decision making

    gander2112  A1: It should be the "What" the "How", the "Why", and also include the risks. Often the first step in a 7step PLC

    nickcoster A1) It does this by communicating the minimum required information to make that decision to the decision makers

    nickcoster A1) as @bdoctor says, it is used to determine what resources to spend and when.

    thefairdesmondo Damian Fawkner A1.2 provide th decision makers wth info 2 make a 'go' or 'no-go' decision 2 either develop or worthy of more investigation

    gander2112 @wapolanco At first the BC isn't wide, but later in the project, it will be seen by many, and must speak to them 2

    rcauvin  #leanstartup folks use a "business model canvas" to convey hypotheses & assumptions in a business case. bit.ly/iudhOk

  11. Q2 Are there any other outcomes that the Business Case addresses? 

  12. KirstenLester A2: Bizcase preps depts that rqmts phase is imminent, so start thinking about what we r to accomplish

    jidoctor: a2: biz case could "subtly" point out weaknesses/ strengths w/i org, to help w/investment decision

    nickcoster A2) Readers should know the "story" behind the Business Opportunity. Including the target market and the problem to be solved.

    gander2112 A2: Biz Case should highlight upside, downside, opportunity cost, impact to org, "Why we win" and what the comp. is up to

    VFigatelix Q2: A BC is an equivalent to a lab and helps us decide if the idea is really an opportunity

    nickcoster A2) It must be clear how both the market will benefit (and exchange value) and how the business plans to extract that value.

    jidoctor yes, @nickcoster, story shld be known, but might not be - biz case should stand on its own w/o having to tell whole backstory

    gander2112 A2: A BC should have a summary of the VoC efforts, and how the opportunity fits into your core competency

    rcauvin W/ a business model canvas, business case is concise & is eleborated w/ explicit assumptions to be tested incrementally

    wapolanco This is key. BC needs to be a concise exploratory kickoff RT @bdoctor: Biz case is NOT a complete biz plan for the product

    KirstenLester @nickcoster well said... clear how both the market will benefit (and exchange value) & how the biz plans 2 extract that value

    nickcoster A2) As the BC evolves it will also include the anticipated costs of addressing the opportunity.

    VFigatelix Q2: BC can also be one of the check points in a go/ no go decision

  13. Q3 What is Product Managements role in the development of the the Business Case?

  14. KirstenLester A3: In lieu of exec sponsor willing to write, PM to write, but still need exec sponsor to push to exec levels

    nickcoster A3) Product Management needs to own the outcome of the business case, since they will be measured against it on implementation

    VFigatelix Q3: PM's are and Prod Mktg are fundamental in BC input - aren't we the market and customer experts? (or wannabe)

    gander2112 A3: #prodmgmt is the principal architect of the Biz Case, but needs much collaboration to get the message/story/data in place

    rcauvin @nickcoster Dangerous to look at business case as fixed. It should be assumed to be wrong and require incremental revision.

    gander2112 A3: As PM, I get some flimsy BC's tossed my way to flesh out. We are a first smell test

    nickcoster A3) The PM should always be involved in the BC development but the inputs will come from all over the business.

    nickcoster @rcauvin Ahh the Agile business case!! Thanks Roger.

    gander2112 @nickcoster re: wide inputs needed - I call this "breathing our own exhaust" A bad practice

    rcauvin @nickcoster Need to identify & test the assumptions of the business case early & revise accordingly.

    VFigatelix @nickcoster can you please tell us about the agile BC?

    gander2112 My problem with changing/evolving BC is that selective amnesia seems to be common, and #prodmgmt gets blamed for deviations

    nickcoster @gander2112 "breathing our own exhaust" - this should not be the key driver of the BC, but should still be considered

    gander2112 @nickcoster It is why I live the "validate" everything life. re: Breathing our own exhaust

    rcauvin @VFigatelix #lean uses "agile business cases". It's about testing business hypotheses iteratively much as devs test software.

    Macmyday Just the way I see it @nickcoster RT A3) PM should always be involved in BC dev but inputs will come from all over the biz

    KirstenLester A3: In lieu of exec sponsor willing to write, PM to write, but still need exec sponsor to push to exec levels

  15. @nickcoster giving us the 4 Business Case stages
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