October 9, 2016 at 5:47 pm #4960
The Transition Economics Business Case
Business Cases are mentioned often in Transition Economics and as a voter, or decision-maker, you should be asking to see one before you accept any policy. What is the track record of this policy in other countries? What is the targeted Return on Investment? Does this Policy align with Transition Economics Maturity and Renewable Automation Goals ? What are measures of success and mitigations will counter risks that come along?
Credibility of Business Cases is important too. Basing targets on widely available GDP Exports, Imports, and similar stats keeps strong focus on advancing economies as the world will also view your economic indicators. Consumer Surveys and non-standard are subjective and not relevant nor recommended to Transitioning your Economy from a collapsing trajectory.
What to look for in a Business Case
Pros and Cons, Costs and Benefits – Optimistic/Pessimistic/Realistic and Long/Mid/Short Term, Return on Investment, Mean Time to Profitability, Track Record other Countries, and Contribution to RAI, TE Maturity; Is it Renewable; Is it Sustainable – are all Table of Content and Checklist items for a Transition Economics Business Case.
A Business Case and a Charter Document have a few things in common. Business Cases want to explain initial Stakeholders, Budget, Communications Plans, Timelines, Goals and Objectives.
A Business Case relies on estimates for cost that have to guess at some very broad design discussions. Costs will differ greatly depending on needs of redundancy, MTBF (Mean Time Between Failure), Percentage of New vs Available Technology, new staff costs more than existing trained staff, size and cost of test equipment needed differs, land, technical complexity and so on.
According to SUSTAIN PPM, a general budgeting rule for Business Case estimates can often be +100% or -50% over/under; Requirements Docs can narrow those estimates down to +-25%, and Design Documents with Detail Implementation Plans completed – should be +-5% accurate.
You can make some general assumptions. Like a major project will take six to 12 months to lead to a Pilot; 18 to 24 months to produce automations that integrate with other systems. These timelines are pretty reliable guesses for a surprising percentage of most projects.
Begin with a Dashboard Summary View
Elevator-pitch decks are used frequently in addition to Business Case Templates, so here are a few screens from the Powerpoint example template link above.
Y1 Y2 Y3 Y4 Revenues $ 1,045,440 $ 3,346,650 $5,661,360 $7,942,320 Employees 14 28 31 31
- People, Processes, and Technology
- Stakeholder Staff & Organizations – Managers, Technical, Accounting, Legal, Advisory Committees, Think Tanks, Academics, Sales, Marketing, Operations, Trainers, QA, Governance.
- Business Driving KPIs – like Fleet Vehicles, Servers, software licenses per client; Average cost & profit per Sale
- SG&A – Sales, General and Admin, Advertising, Bank Fees, Credit Cards
- Rent, phones, automobiles, facilities, Insurance, Courier, Postage, office supplies, subscriptions
- Charitable Donations
- Professional Fees, Printing, Training
- Assets and Depreciation
- Transition Economics Throttling Inputs – Jobs lost due to automation, offshore hiring and crews
- Transition Economics Throttles; compensations and rates of change that afford guaranteed income programs from higher automation profits or efficiencies. See Chapter 18.
- Products and Cost per Product
- Sales Revenue & Profit Per Unit / Per Product
- Resource Assumptions – RACI it. Who does what? High-level only at this point of course.
- Risk Plans – Important risks should articulate a mitigation plan. List Probability/Impact.
- 7-year Cash Flow, Profit and Loss, Balance Sheet
- Short, Mid and Long Term Targets and Tracking
- Timelines and Summary
Transition Economics’ Business Cases are introduced in two new books :
You must be logged in to reply to this topic.