The Business Case is the most important part of your next big project, but do you know what it is, what it does and how it can help you avoid disaster, frustration, financial ruin and possibly your job!
Published by Infinity Gaming Magazine – April 2021
Any manager that hasn’t experienced failure has either never been a manager or has never achieved anything other than becoming the artful dodger and the box ticker that wrote the “how to” manual on avoiding failure by blaming others. Failure is how we learn, failure is how we grow, and failure is part of human nature so we must embrace it and use it as a powerful tool on the wet, cold and often treacherous road to success. The good news is that a well written business case will minimize the dreaded risk of failure by providing simple guidelines and clearly defined project objectives that will inspire confidence, maintain focus and help your project finish on time and on budget while adding essential value to your customer experience. It will also turn you into a key person of influence, transform your boss into a legend and greatly decrease the risk of you being thrown underneath yet another proverbial bus should failure rears its ugly head.
The main purpose of the business case is to establish mechanisms to judge whether a project is desirable, viable and achievable. It serves as the business justification for the project and weighs the costs of the project against the anticipated benefits. It is created prior to project approval and is reviewed and update throughout the life of the project so that the focus remains on ‘why’ the work is being done as opposed to the ‘what and how’ approach to work that needs to be done. The main composition of the business case is as follows:
Problem Statement: The main focus of the business case is the problem statement (also known as executive summary) and it focuses on the pain that you business is experiencing and provides a high level analysis and possible solution for how you intend to turn your business pain into prosperity. A poorly written problem statement might read something like: “Antonio from marketing told me that somebody told him that we should increase the hold percentage on the slots because it will attract more customers.” A well written problem statement might read as follows: “During the first quarter of 2022, the slots customer counts was down by 10,000 player’s. This represents a decrease of 10% from the same period in 2021 which amounts to loss of 2.2 million in quarterly net win. By making changes in 5 key areas of slots operations over the next 6 months we can recoup lost revenues and see a healthy ROI within a 12 month period.” Can you spot the difference?
Project summary: Defines and describes in greater detail how the project will put the problem statement to rest and explains how it will enable the achievement of company strategies and objectives. For example: “By making changes in 5 key areas of slot operations, including slots performance, slots inventory, slots marketing, players club and customer service evaluation techniques, we will add more value to the customer experience, improve revenues and ultimately grow the customer count and the strength of the brand.
Business options: Provides a clear analysis and reasoned recommendation for the basic business options of do nothing, do the minimum and do something. ‘Do nothing’ should always be the starting point to act as the basis of quantifying the other options. The difference between ‘do nothing’ and ‘do the minimum’ or ‘do something’ is the benefit that the investment will buy. A good example of business options might be: “The option of ‘doing nothing’ will result in an accelerated decline in customer counts. The option of ‘doing the minimum’ will only stall the decline but will most likely not result in an increase in revenues. The recommended option of ‘doing something’ will increase customer counts by replacing some of our worst performing slots and upgrading others. Additional efforts to increase the customer count will come from a change to the current slots promotions, a change in players club strategy and a change in customer service evaluation tools and techniques.
Expected Benefits: These are the result of the desired outcomes to be achieved through the outputs of the project and are expressed in measurable terms against the situation as it exists prior to the project. Benefits might include more competitive and better performing slots that can be measured in terms of revenues as a direct effect of the increase in customer counts; promotions and player’s club offerings that are more customer focused will generate higher customer counts which is how the benefits can be measured. A higher level of customer service due to a highly motivated, engaged and better trained staff can also, you guessed it, be measured in terms of the customer count.
Expected Dis-benefits: The impact of one or more outcomes of the project that might be perceived as negative by one or more stakeholders. All projects come with a certain level of risk and despite your best intentions the majority of your hypothetical positive outcomes can result in a dis-benefit as a direct consequence of an improvement activity. A typical dis-benefit might be that an increase in customer counts could be perceived as causing an increase in problem gambling. Another could be that one of the proposed new machine models requires specialized maintenance which will increases downtime and service costs. Whatever the perceived dis-benefit may be, it needs to be valued and incorporated into the investment appraisal
Timescale: The period over which the project will run and the period over which the benefits will be measured. This usually includes a project stage by stage timescale summary that comes directly from the project plan.
Costs: A summary of the project costs and, the ongoing operations and maintenance costs and funding arrangements. These also come from the project plan.
Investment appraisal: Compares the aggregated benefits and dis-benefits with the project costs and ongoing incremental operations and maintenance costs. The selection of appraisal technique may be influenced by the type of organization’s and their own standards. Nobody want’s their project to fail but if the benefits don’t justify the investment the project will fail and in failure will come the proverbial bus of destiny. Appraisal techniques include but are not limited to whole-life costs, net benefits, payback period, net present value and ROI.
Major Risks: Gives a summary of the key risks associated with the project. The purpose of the risk theme is to identify, assess and control uncertainty and are measured in terms of a perceived threat or opportunity occurring and the magnitude of its impact on objectives. Typical risks examples could be related to a change in gaming regulations that could impact revenues generated by the new machines; the risk that the new games won’t be popular resulting in an increased ROI timeframe. A disruption to current operations during project execution could impact customer counts and revenues. As part of project management, a risk management approach is prepared that describes how risk will be managed. It includes processes, procedures, techniques, standards and responsibilities.
Conclusion: The business case is a simple and effective tool that should be used to justify your project before approval and to assist in maintaining focus on the business justification during the life of the project. It’s an essential part of project management that will save you time, money and add value to your customer experience. Stay tuned to for more slot management 101 tips and improve your chances of lasting success in these most uncertain times.