In many companies, Business Cases – or “Value Cases” – are standard tools when it comes to making decisions about projects, transformations, or investments. However, from the perspective of many consultants, the reality is sobering: most of these cases are neither a valid decision-making foundation nor an efficient management tool. They consume time, produce questionable results, and often lead to poor decisions at the management level.
Where Companies Fail When Creating Business Cases
In around 90% of the cases I encounter in practice, Business Cases are merely a formality. Often, they are only created after the project has already been decided. The consequences: time pressure, poor structure, error-prone logic, and unrealistic assumptions.
Moreover, a few specific aspects of the approach – such as the inclusion of cost rates for internal resources – can be decisive when it comes to “GO!” or “NO GO!” decisions, as well as questions of prioritization (opportunity cost principle).
Typical problems:
• Complexity without structure: bloated files with 20+ sheets, lack of transparency, and error-prone formulas.
• Lack of Excel and financial skills: Cases are often created by individuals who lack either financial understanding or – more often – the necessary Excel skills to build dynamic, logical, and comprehensible models.
• No follow-up: Once the case is created, it often disappears into a drawer. Actual vs. planned comparisons, scenarios, or adjustments? Nowhere to be found.
• Fudging numbers and assumption errors: Inaccurate inputs, missing separation between input and output, manual overwrites.
• No real value for management decisions: So visually and logically inaccessible that informed steering is impossible.
Some simple but Golden Rules for Value Case Design
📌 1. Only let professionals build the case
• Development should be done exclusively by experienced Excel users! Only then are dynamic models and later Value Case management/maintenance (even by less experienced users) possible.
• Financial understanding is essential for appropriate modeling.
• Most errors arise from poor modeling – not from incorrect content.
🔄 2. Always plan dynamically, not statically
• All key values (start date, exchange rates, interest rates, etc.) should be placed on a separate variable sheet.
• No hardcoding in calculations.
• Ensure scenario capability and ease of updates.
🎯 3. No pseudo-precision (and the 80/20 rule)
• Plans always come with deviations – detailed precision is pointless if other assumptions have a significantly higher impact.
• Avoid unnecessary detail if it doesn’t yield insights.
• Keep plans ambitious but always realistic.
📉 4. As few sheets as possible
• Period-based planning allows consolidation to a few sheets. For example, the entire financial plan, including income statement and cash flow, can be transparently displayed on a single sheet.
• Clarity increases comprehensibility.
📋 5. Use a central variable sheet
• Maintain all global parameters in one place.
• Enables dynamic control and central management.
• Ideally, this sheet is hidden.
🎨 6. Consistent, functional design
• Strict logic to visually differentiate between input and output (and other) fields.
• It is helpful to further distinguish between standard and high-impact input fields.
• Document the visual structure in a cover sheet or manual (useful for other users, supervisors, auditors, etc.).
✍️ 7. Strict separation of input and output areas
• Never manually overwrite calculations (use formatting logic for safety).
• Clearly separate input and output columns.
• Prevents data loss and logical errors later on; also supports central and clear scenario setup and control.
✅ 8. Input checks and validation
• Use conditional formatting to verify plausibility and highlight incorrect inputs (e.g., weighting sum ≠ 100%).
• Again, “slow is fast”: the upfront effort is low, but the time saved and risk reduction at the end is significant.
⚖️ 9. Use realistic assumptions and include buffers
• No sugar-coating: realistic but ambitious targets.
• Include buffer amounts, ideally per cost category – this allows for ambitious assumptions while maintaining planning realism and decision usefulness.
💼 10. Always assign costs to internal resources
• Internal hours are not free – consider opportunity costs.
• This avoids poor decisions based on distorted cost structures.
💸 11. ROI < 3 years (rule of thumb)
• Project benefits should materialize within less than 3 years.
• Operational processes statistically change every 3 years – later break-even makes no sense.
• Exception: strategic topics with clear added value or multiplier effects (e.g., reputation).
📊 12. Consider reporting from the start
• Model reporting logic from the beginning (separate output sheets) and make it dynamic.
• Prepare outputs for different target groups.
• Saves time in the long run and increases usefulness for report recipients through consistent, comparable content and detail.
🔢 13. Consider opportunity costs
• Always include Net Present Value (NPV) with an alternative rate of return.
• NPV is generally one of the most important KPIs for management decisions, as well as for “GO!” or “NO GO!” and prioritization.
• Internal benchmark rates are often higher than market rates – so projects may not be profitable under the opportunity cost principle.
🔄 14. Best/Worst Case Scenarios
• Ideally, always include dynamic Best/Normal/Worst Case scenario modeling – minimal effort if considered from the beginning.
• Maintain scenario weighting factors centrally in the variable sheet.
• Strengthens decision quality and allows analysis of potentially flawed assumptions and their impact.
📚 15. Index & Manual Sheet
• Overview of all included sheets with short descriptions.
• Documentation of input logic and project information (name, version, sponsor, etc.).
• Optional: internal links for quick navigation.
🧷 16. No live links to external files, no dynamic imports from other files
• No dynamic sources (links break easily, storage paths and filenames change).
• Ensures traceability, compliance, and accessibility (avoids access restrictions on input files).
Conclusion
A good Business Case is not an end in itself and not a fair-weather model. It is a decision and management tool – but only if it is built cleanly, dynamically, realistically, and transparently. Those who build it professionally will save time in the long run, avoid poor decisions, and create real value.
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