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New Vendor/Technology Business Case Process Template

Use this process template to create a business case proposal for new vendors or technological tools.

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New Vendor/Technology Business Case Process Template

Use this process template to create a business case proposal for new vendors or technological tools.


Why We Have a Business Case Proposal Process

Creating a business case for a new vendor or technology solution is super important! With a solid business case, decision-makers can see why the proposed solution is necessary and how it fits into the organization's goals. 

Plus, it helps justify the costs, so you can get the green light on that budget. And hey, if anyone questions the funds later on, you've got your backup ready. Not to mention, a business case helps identify any potential risks and how to handle them. This can help to avoid unpleasant surprises and ensure that the new product or service is a success, both in terms of achieving the desired outcomes and staying within budget.

By creating a business case, you can make sure that you're not just spending money but investing in the future of the organization.

Business Case Proposal Process

SOP for Proposing a New Vendor/Technology

Follow these steps when preparing a new vendor or new technology business case for leadership review:

  1. Identify the business problem: Clearly define the problem or opportunity that the proposed vendor or technology solution aims to address in the business. This could include inefficiencies, gaps in current systems, or the need for innovation.
  2. Research and gather evidence: Conduct thorough research to gather evidence that supports the need for the proposed solution. This can include market research, competitor analysis, process improvement, customer or internal feedback, and industry trends. Seek out unbiased feedback, case studies, empirical data, and proofs of concept to strengthen your business case.
  3. Outline the proposed solution: Clearly articulate the vendor or technology solution being proposed. Describe how it aligns with the identified business problem and how it will address the needs of the organization. Highlight the key features, benefits, and potential impact on the business.
  4. Assess costs and benefits: Provide a detailed analysis of the costs associated with implementing the proposed solution, including upfront investments, ongoing maintenance, and potential risks. Balance this with a comprehensive assessment of the expected benefits and return on investment. Look beyond initial costs and consider long-term value. 
  5. Engage stakeholders: Collaborate with relevant stakeholders throughout the process. Communicate with department leaders and key contributors to ensure their awareness and agreement with the proposal. Incorporate their feedback and address any concerns or blind spots.
  6. Create a product comparison sheet: Create a spreadsheet or document to compare the proposed vendor or technology solution with other available options in the market. List out the categories you want to compare, such as pricing, features, benefits, and risks. This highlights the unique features and benefits of the proposed solution and how it stands out from the competition. 
  7. Develop a business case document: Compile all the information and findings into a formal business case document. Include an executive summary that provides an overview of the proposal, the problem, the solution, and the expected outcomes. Present the evidence, costs (including implementation & training hours), benefits, and risks in a clear and concise manner. 
  8. Submit for Review and Approval: Submit the business case document to the leadership team for review and approval. Ensure that all contributors named in the document have seen the final draft and are aware of their involvement.

Risks and Mitigation Strategies

No matter how many benefits a software or service has, there are sure to be some risks or downsides to the investment. The business case should address these challenges head-on, along with a solution for these challenges. 

For example, if there are requirements or additional equipment the team needs to adopt along with the new software, now is the time to address those needs while focusing on how those investments will ultimately benefit the entire company.

Example of a Business Case Document

This is an example of a business case document that we might use to argue for the implementation of Slack at our business:

1. Identification of the Business Problem
Our current communication processes are proving to be less efficient than desired. Emails often lead to cluttered inboxes and lost threads, making it difficult to keep track of project-related conversations. 

Moreover, the absence of an integrated platform for team collaboration hampers productivity and leads to fragmentation, causing project delays and miscommunications.

2. Proposed Solution
I propose the introduction of Slack, a powerful messaging system designed for businesses. Slack brings team communication and collaboration into one place, facilitating real-time messaging, file sharing, and integration with other business tools like Google Drive, Office 365, and more. This solution is aimed at streamlining communication, enhancing project tracking, and fostering a collaborative work environment.

3. Cost Analysis
Slack offers four pricing tiers: 

  • Free.
  • Standard ($6.67 per user per month).
  • Plus ($12.50 per user per month). 
  • Enterprise Grid (pricing varies). 

For our size, I recommend the Standard plan, offering unlimited message archives, shared channels, group calls, and more.

For 25 employees, the monetary cost comes to $6.67 * 25 = $166.75 per month or $2001 per year.

Training time will be crucial for smooth implementation. As Slack is user-friendly, a three-hour training session should suffice, costing approximately $500 (considering an average hourly wage of $20). Thus, the total first-year cost is approximately $2501.

4. Benefits of Implementing Slack
Improved Communication: Slack offers real-time messaging, making team communication faster and more efficient.

Better Collaboration: With shared channels and file sharing, teams can work together seamlessly, reducing project timelines.

Increased Productivity: Slack integrates with various other business tools, eliminating the need to switch between applications.

Organized Conversations: Slack's channels and threads help to keep conversations organized and easy to follow.

5. Risks of Using Slack
While Slack brings numerous advantages, potential risks include:

Privacy Concerns: Slack can access customer data for legal and compliance reasons.

Over-dependence: Too much reliance on Slack could lead to problems if there are service outages.

Distraction Potential: If not managed correctly, constant notifications could lead to decreased productivity.

6. Product Comparison: Slack vs. Google Chat vs. Microsoft Teams
While Google Chat and Microsoft Teams offer similar services, Slack provides distinct advantages:

Integration: Slack's third-party integrations far surpass Google Chat's and Microsoft Teams' offerings, thus allowing users to seamlessly merge their other business tools.

Interface: Slack's interface is more user-friendly and intuitive, fostering higher user adoption rates.

Customization: Slack offers extensive customization options for channels, notifications, and even emojis, thus catering to a more personalized user experience.

In conclusion, implementing Slack could significantly enhance our communication and collaboration efforts, leading to improved productivity. The cost is reasonable considering the potential benefits. However, it's essential to educate our team on the proper usage to minimize risks.

I recommend that we run a one-month trial to gauge the effectiveness of Slack within our team. Please let me know your thoughts so we can move forward with this opportunity to improve our team collaboration.

Project Team & Timeline

Identify the project team members who will be responsible for implementing the proposed solution. This should include internal stakeholders as well as any external vendors or consultants.

Provide a timeline for the implementation of the proposed solution. This should include key milestones and deadlines.

By creating a business case for a new vendor or technology solution we can:

  • Justify the investment and secure budget approvals.
  • Ensure alignment among the project team, stakeholders, and decision-makers.
  • Identify potential risks and develop mitigation strategies.
  • Optimize budget allocation and align with financial goals.
  • Formalize the procurement process and provide a clear roadmap for implementation.

By following this process our team can make informed decisions, mitigate risks, and invest in solutions that align with our company goals. This ultimately leads to improved efficiency, increased productivity, and a positive impact on the financial health of the organization.

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