Step 4: Develop a Business Case for your Project

Now that we have the problem as well as the goal statement handy, it is time to ensure that these statements are well articulated in the business case.

The management has to choose amongst several possible six sigma projects while granting its resources. The ones that do succeed in getting the resources from the management are ones that have clear cases of compelling value proposition.

Here is more about the business case:

What is a Business Case ?

A business case is a document that uses the problem and the goal statements and converts it into a statement of business value. The management might understand that there is a problem and that you have a goal after reading your problem and goal statements. However, is your project solving one of the most urgent problems confronting the organization is what the business case is supposed to convey.

What makes a Business Case Compelling ?

• Strategic Linkage: Think at the organizational level. The top management has to make a choice between several strategies which may be good for the firm. While all of them may be good, the management has to choose which will be best in the long run and follow it.

  There is nothing which makes a better business case than the ability to make the organization believe that the Six Sigma project will make it reach closer to its strategic objectives

• Benefits: The management is not very concerned about the problems unless they are significant. In huge organizations small problems are present in almost every department. However they need to be solved by the lower level management.

  The Six Sigma project is managed by the top management who are concerned with the benefits that your project will provide to the organization. The project must include benefits like cost savings, increased service levels, increased efficiency and the like.

• Link to Problem and Goal Statement: A business case must tell the loss that is happening because of the problems identified in the problem statement.

  It must also talk about the benefits that will be gained by achieving the goals mentioned in the goal statement. The difference between the two numbers is the business value of the Six Sigma project that is being proposed to be undertaken.

• Brief: A verbose business case can mar a well identified problem and well selected goals. Although the management must be capable to sift through the language and come to the point, they seldom are.

  It is the initiative of the process owner that he/she must come up with a case that is easy to understand. This will make it most compelling to the management.

Example: The loss in productivity as a result of employees coming late is $5 per minute per employee. Hence for a 1000 employees (40% of the workforce), the management is losing $5000 per minute for 15 minutes i.e. $75,000 every day.

If the organization thinks saving $75,000 going down the drain is their priority, they will buy in the business case.