3. Develop the business case
After the product vision is developed and you identify the success metrics, building a complete business case becomes much more straightforward. The choices made during the previous stages, the contributions and discussions between the different stakeholders, and the specific, quantifiable value drivers defined for the product enable the development of a solid business case with justifiable targets and defensible assumptions.
To develop the product's business case, the product team can use the defined success metrics as the primary value drivers for the business case. Because these success metrics are directly aligned with the product's intended business outcomes, the product team anchors the business case in these outcomes. The success metrics are also quantifiable, which facilitates the estimation of the business case targets over the expected time frame for the return on investment. It's important to note that the value drivers considered in the business case are not only focused on revenues and net new cash. They include savings and efficiencies that can be attributed to the product features and capabilities.
The product vision is also very useful for identifying the investment requirements on the cost side of the business case. The product vision articulates the planned features and capabilities, which facilitates the estimation of the costs associated with the product's development and delivery. It also helps you to estimate the expected operational expenses throughout the product's lifecycle.
Note that this approach to business case development focuses heavily on data and quantifiable measures, establishing defensible links between the different value and cost components and the product's expected business outcomes. In many cases, the data required for the development of the business case might not be readily available. Instead, deep investigation to extract, organize, and use the data might be required. This is another important contribution of this approach to product strategy, because it forces deliberate and quantifiable thinking throughout the whole product-development process. Many businesses found this exercise to be helpful in clarifying assumptions, aligning expectations, and driving successful product launches.
The business case development should be approached as an iterative process. The discovered data is used to challenge and refine assumptions, possibly changing the focus of the value drivers. For example, in the case of one product, the data discovery showed significant differences between the value drivers across the different lines of business. These differences were taken into consideration, and the success metrics and business case were re-structured to account for these variations. This adjustment led to a more defensible and robust business case.
