Business Case Spreadsheet IRR

Business Case Spreadsheet (Template)

TOCBusiness Case Spreadsheet (Template)Table of ContentsIntroductionThis workbook is called the Business Case Spreadsheet Template (BCT). Its purpose is to provide the user with a head start in building a thorough financial analysis and justification for a project.The BCT was constructed as a result of research and analysis of cross-industry, commercial best practices.The delivery of the BCT is part of the Enterprise Integration Toolkit which provides a structured method, guidance and tools to DOD personnel in applying cross-industry, commercial best practices to Commercial Off-The-Shelf (COTS) software application procurement and project implementations per OMB circular A-94.OverviewThe BCT is a multi-tabbed Excel workbook containing pre-constructed forms for input of all key project estimates, financial analysis, sensitivity analysis and summary charting of results.The goal of the BCT is to guide the user through the process of gathering project parameters and financial estimation input, iterating on and refining project estimates, completing a detailed financial analysis, producing summary metrics, and, ultimately, using these results to support a "go"/"no-go" decision for project approval and funding.The BCT allows for 3 increasingly precise methods of estimation for each major category of cost or benefit. The three estimation types are High-Level, Parametric & Actual. Many of the detail level tabs have headings for each of these three types of estimation in the left margin.Information flow within the BCT generally goes from tabs on the right (detail) to tabs on the left (calculation, aggregation and summarization). Therefore, navigation for user familiarity is recommended to start from left (view results/outcomes at summary level) and proceed to the right (understanding of detailed input & estimations).Conventions: Fields to be used for user input are in red text, fields carried forward or referenced by other tabs are bold, calculated fields are in black text.Overview instructions are provided below. More detailed, supplemental instructions are provided within each tab on its use.Per Tab DetailsCash Flow & ROI AnalysisThis tab contains various measures of financial feasibility, Return on Investment (ROI) and justification, including: Net Present Value (NPV), Internal Rate of Return (IRR), and Breakeven. Pulls data mainly from the Cost & Benefit Summary tab. Also pulls a few, key input parameters from Input of Assumptions area of Input Sensitivity tab.Also contains the underlying year-to-year estimated financial results, which roll-up into a Cash Flow (CF) analysis containing the following sub-categories: One-time costs (expenses and capital), Ongoing Costs, Ongoing Benefits, Depreciation.Input & Tornado Sensitivity AnalysisLocation of all key input parameters. Also, provides workspace to run the integrated Tornado macro. This macro takes user-defined input parameters and produces a tornado diagram. This chart allows the user to analyze the relative importance of the input parameters in terms of their influence on the outcome of the BCT model (typically outcome is measured in 5 year NPV). This type of sensitivity analysis is in compliance with OMB circular A-74.Cost & Benefit SummarySummarizes major categories of costs and benefits. Acts as a rudimentary "pivot table" for user selection of level of estimate. As directed by "x" marks from the user, the CostBenefit Summary tab pulls information from the appropriate estimation type area of each supporting, detailed workbook tabs: Savings, Revenue, Incremental Ongoing Costs, Project Expenses & Project Capital.Savings Benefit EstimatesProvides a workspace for user quantification of incremental cost savings benefits of a project at three, increasingly accurate/detailed levels of estimation. Pulls key input parameters from Input of Assumptions area of Input Sensitivity tab.Revenue Benefit EstimatesProvides a workspace for quantification of incremental revenue generating benefits of a project at three, increasingly accurate/detailed levels of estimation. Pulls key input parameters from Input of Assumptions area of Input Sensitivity tab.Sample Benefits Identification ModelProvides an approach to thinking through the potential benefit areas, benefit metrics and benefit calculations associated with a proposed project in a commercial setting. Currently no inbound or outbound links to/from the rest of the Business Case Template.Incremental Ongoing CostsProvides a workspace for user quantification of various, incremental, ongoing costs as a result of implementing the project. This sheet provides for this quantification at three, increasingly accurate/detailed levels of estimation. Pulls key input parameters from Input of Assumptions area of Input Sensitivity tab.Project ExpensesProvides a workspace for quantification of project expenses required for project implementation. In IT projects, this typically consists of consulting, integration, programming, related travel & expenses, and computer hardware, network equipment, or software that does not fulfill the rules for availability to depreciate over time. Internal labor costs and associated travel & expenses are also typically counted in this category.Project Capital ExpendituresProvides a workspace for quantification of project capital goods required for project implementation. In IT projects this typically consists of computer hardware, network equipment, some custom-developed computer software and some consulting. On occasion, this category might also include other capital items such as buildings, furniture, telecommunications equipment, or building renovations.GlossaryProvides a listing of key words or phrases, their definition, and how their used.ChartsProvides graphical summaries of financial and other analysis results from the BCT.SimulationProvides workspace where the user may run a separately downloadable Excel add-in to automatically simulate many scenarios of the BCT, with user-specified variance of a parameter to generate an inverse cumulative distribution curve.Installationhttp://www.kellogg.nwu.edu/faculty/myerson/ftp/addins.htmSimTools add-inThe BCT uses an Excel add-in, SimTools, which is available for download at the above URL. SimTools supports Monte Carlo simulation and additional statistical analysis of uncertainty in the cost-benefits model. Click on the above link and follow the instructions for downloading to enable these features.Instructions1Read the Business Case Developers Guide to understand the overall approach to developing a business case.2Familiarize yourself with the overall structure of the workbook, the approach used for each tab and its subsequent information flow.3Use the Benefits ID tab to identify all savings and revenue benefits of the potential project.4Perform ballpark parameter research.5Revise benefit scenarios in the Savings and Revenue tabs.6Revise Incremental Ongoing Costs, if necessary.7Revise Project Expenses and Project Capital tabs as this information becomes available.8Revise and proof workbook calculations.9Ensure "x" marks are provided in the appropriate column of the CostBenefit Summary tab and point to the most accurate/appropriate section/information in each detailed tab. At this stage, most are likely to be "parametric" estimates.10Enter all key input parameters in the Input of Assumptions section of the Input Tornado tab. Then, create references to them from all appropriate, underlying detailed tabs.11Run preliminary sensitivity analysis & produce tornado diagram by using the Tornado macro.Follow the instructions in the Input Tornado tab and within the macro, itself. NPV is recommend as the best output cell as demonstrated in the sample.A new sheet will be created in your workbook. It will contain the new tornado diagram, sorted so that the parameters having the most influence on the output cell (NPV in our sample) are at the top and contain the largest horizontal bars.12Identify high impact input parameters by looking at top of tornado (largest bars mean degree of influence).13Perform parametric research, prioritizing those parameters that were at the top of the most recent tornado diagram.14Refine accuracy of all estimates used as input parameters.15Run 2nd sensitivity analysis & produce tornado diagram.16Download SimTools and place in appropriate directory17Select key parameters and run simulation sensitivity analysis.18Produce charts.19Utilize results as recommended in the Guide20Refresh input parameters as more accurate or reliable estimates or information become available. Repeat steps 16 -19 as necessary.21After project is implemented and operations are expected to be enjoying the estimated benefits, capture actual Key Performance Indicator (KPI) data.22Utilize the information gathered in the step above as Actual Results-level input parameters. Ensure "x" marks in in the appropriate columns in CostBenefit Summary tab. Perform calculations of actual project ROI & summarize/chart results for use in executive presentation.TroubleshootingImmediately upon opening the BCT, click on the Enable Macros button to allow the proper operation of the Tornado diagramming macro for sensitivity analysis.If you don't see the Tornado macro under the Tools\Macros sub-menu, your instance of Excel has been configured to disable macros. Please consult with your helpdesk to have macros enabled.If the user is attempting to build a reference to a cell within Project Capital or Inctl Ongoing Costs and the typical Excel cursor turns into a hand, preventing specific cell reference, type in the cell location instead.EITK0304

&C&"Arial,Regular"&9Busines Case Spreadsheet (Template)&L&"Arial,Italic"&9EI Toolkit Document version 1.0, December 2003Last validated: December 2003&R&"Arial,Italic"&8Page &P of &NEITK0604http://www.kellogg.nwu.edu/faculty/myerson/ftp/addins.htmCash Flow & ROI AnalysisInput & Tornado Sensitivity AnalysisCost & Benefit SummarySavings Benefit EstimatesRevenue Benefit EstimatesSample Benefits Identification ModelIncremental Ongoing CostsProject ExpensesProject Capital ExpendituresGlossaryChartsSimulation

ChartsBusiness Case Spreadsheet (Template)Charts1Note that this single chart incorporates all significant cash flow measures. For some presentations it may be advisable to produce multiple, simpler charts.

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Charts0-1204556-2358261.48-2358261.483827001.5-1572644.1251639451.0775-718810.40253310796.025-1205939.81552740.4105833930.0083047217.175625-1002663.51251517764.92461252351694.93261252887683.87689062-903702.261718751482633.136799693834328.069412192857761.9538647-863810.1102953931488415.86927025322743.93868238

&APage &PInflowsOutflowsNet Cash Flow AnnualCumulative Cash FlowSummary Cash Flow

SimulationBusiness Case Spreadsheet (Template)Simulation Sensitivity AnalysisStep #Sensitivity Simulation Instructions1Generate a tornado diagram following steps in Tornado Diagram section of Input Tornado tab. Identify top influencial parameters.2Plug the following formula into the best estimate cell for a key parameter of the Input Sensitivity tab:=NORMINV(RAND(),0.15,0.1)SimTable2,827,104Where NORMINV is the function that best approximates the shape of the distribution for this parameter.0.04,848,427Where the mean of the distribution is 15% and the standard deviation is 10%.0.014,624,103Where RAND() is used to generate random numbers between 0 and 10.024,612,879Where the NORMINV function uses this random number to genarate simulations of outcomes (typically NPV in cell D4) for this key parameter as it varies.0.034,471,4503Run SimTable by using the Tools, SimTool, SimTable menu command from within the BCT0.044,386,0634Follow on screen instructions, using 2 columns and approx. 100 rows, starting from cell C40.054,342,3985Sort cells D5 to end in descending order.0.064,308,9556Use Chart Wizard to plot a line graph as above.0.074,236,0637Observe line graph "tilt": the more horizontal the majority of the curve, the more predictable outcome (NPV) is as the key parameter varies according to the shape of the selected distribution curve.0.084,163,2928Refine the chart for use in summary presentations0.094,154,6729If warranted, the user can perform this process for another, key parameter: to isolate the results of each simulation, start by re-keying a "hard-coded" (not formula, not reference) input of the parameter first chosen in step 2. Then go to step 1, select a new parameter and repeat steps 2 on.0.104,141,34310A more sophisticated and thorough variation on step 9 above is to run a simulation on multiple, key parameters simultaneously. To do this, the user would execute step 2 for select parameters (ex: top 5).0.103,890,804*Keep in mind that after the first time Simulation is run according to the steps above, the model outcome (NPV) will change each and every time the user causes the workbook to re-calculate. Therefore, the BCT will not be re-usable for reliable ROI metrics until all parameters in the Input Sensitivity tab are again "hard-coded."0.113,849,6530.123,847,3630.133,830,1300.143,796,9840.153,699,3700.163,672,4670.173,655,0580.183,653,4060.193,626,8820.203,612,7980.213,605,7050.223,564,6010.233,550,2190.243,539,7510.253,501,4420.263,464,0600.273,441,0460.283,430,2380.293,424,2790.303,392,5330.303,385,0230.313,382,4960.323,368,3880.333,359,5930.343,306,6770.353,266,3420.363,260,8960.373,229,1450.383,224,7990.393,213,3840.403,169,0140.413,164,7470.423,083,4180.433,072,9230.443,042,7640.453,023,6230.463,002,3920.472,978,9210.482,947,7550.492,932,4490.502,927,5280.502,912,3110.512,901,9030.522,889,8880.532,863,8220.542,762,2660.552,745,4660.562,732,1260.572,714,9910.582,694,1670.592,677,9370.602,675,5440.612,665,8800.622,607,5300.632,574,0020.642,569,7030.652,560,3580.662,557,1590.672,550,9430.682,524,3060.692,503,7590.702,499,9910.702,495,0080.712,473,3170.722,454,7370.732,439,0210.742,433,4090.752,412,8960.762,229,6310.772,180,9360.782,169,7620.792,115,8290.802,089,1090.812,039,1180.821,858,7780.831,801,7830.841,742,7210.851,652,2070.861,606,6570.871,583,7960.881,536,6850.891,528,0450.901,511,1100.901,485,3000.911,468,0150.921,415,8220.931,155,5840.941,123,3760.951,045,2130.96972,5990.97874,6910.98608,7040.99590,4041.00388,465

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Simulation

Outcomes, Descending SortSimulation of NPV Outcomes Varying % of Improvement in Volume Discount Across an Inverse Normal Distribution

Input TornadoBusiness Case Spreadsheet (Template)Input & Tornado Sensitivity Analysis1. Ensure all key input parameters are "hard coded" (typed in, not calculated or referenced) into the section below. Start with column D. The user may have to point key cells of the many detailed cost and benefits tabs to these cells in this tab. These "pointer" cells in the detail tabs are colored black in this BCT sample to show that they are not input cells. Also within the table below, provide Minimum (column F) and Maximum (column G) data points for the Best Estimate of Input parameter provided in column D.Input of Assumptions(Assumptions)Tab NameSection NameBest Estimate ParameterName of ParameterLow Estimate of ParameterHigh Estimate of ParameterROI and CF AnalysisAssumptions Per Year15.00%Discount Rate10%25%ROI and CF AnalysisAssumptions Per Year2.5%Annual Cost Increases0%7%ROI and CF AnalysisAssumptions Per Year2.5%Annual Benefit Increases0%7%ROI and CF AnalysisAssumptions Per Year42%Corporate Tax Rate35%49%ROI and CF AnalysisDepreciation & Interest Schedule8.5%Interest Rate6%12%SavingsPurchasing10%Est. % improvement in Purchasing productivity0%25%SavingsPurchasing10%Est. incremental % of comparable products identified5%15%SavingsPurchasing10%Est. % improvement in price per P.O.7%15%SavingsPurchasing10%Est. incremental % of same vendor/same month orders4%18%SavingsPurchasing15%Est. % improvement in volume discount5%40%SavingsMaintenance & Repair10%Est. improvement in Maintenance & Repair worker productivity5%15%SavingsWarehousing/Inventory10%Est. avg. reduction in # parts per warehouse7%13%SavingsLogistics, et al.10%Est. improvement in Logistics worker productivity5%15%SavingsLogistics, et al.20%Est. avg. reduction in cost per work order10%30%SavingsLogistics, et al.25%Estimated reduction in premium freight shipments0%30%SavingsCustomer Service10%Est. avg improvement in C.S. & O.M. worker productivity5%15%SavingsCustomer Service50%Est. % reduction of incorrect orders35%60%SavingsCustomer Service50%Est. % reduction in complaint calls10%70%SavingsIS3Est. # decomissioned systems24SavingsFinance10%Est. avg improvement in Finance worker productivity5%15%SavingsHR10%Est. avg improvement in HR worker productivity5%15%RevenueSales5%Est. % increase in price per order2%10%Sales10%Est. % improvement in close rate0%20%Sales10%Est. % decrease in order processing time3%13%Sales10%Est. % improvement in sales travel efficiency0%25%Sales10%Est avg annual reduction in customer loss5%15%Customer Service10%Est. % improvement in customer satisfaction2%14%Customer Service10%Est. incremental % of leads passed per C.S. worker5%30%Benefits IDOngoing CostsProject ExpensesProject Capital2. From the Tools menu, select Macros, highlight TORNADO and click on the "Run" button. Then, follow the pop-up instructions provided by the macro itself. The resulting chart will appear within a newly inserted tab (Sheet 1) in this workbook.Tornado Sensitivity Analysis5 Year NPV2,827,104Savings Sensitivity Analysis OutputsParameters:Output D48 with low value from F4:F24 for parameter in D4:D24Output D48 with high value from G4:G24 for parameter in D4:D24Output Differences:Est. % improvement in volume discount1,614,2705,069,6813,455,411Est. incremental % of same vendor/same month orders1,712,9963,786,2432,073,246Discount Rate3,245,2601,624,7071,620,553Est. incremental % of comparable products identified2,094,0423,109,0191,014,977Est. % improvement in price per P.O.2,297,0373,109,019811,982Corporate Tax Rate2,986,2932,216,767769,526Annual Cost Increases2,478,7082,835,470356,762Est. % improvement in Purchasing productivity2,520,3322,723,328202,995Est. # decomissioned systems2,520,3322,682,728162,396Est. % reduction in complaint calls2,500,0332,652,279152,247Est. avg. reduction in # parts per warehouse2,530,7112,672,349141,638Est. avg. reduction in cost per work order2,551,9382,651,12399,186Est. improvement in Maintenance & Repair worker productivity2,560,9312,642,12981,198Est. improvement in Logistics worker productivity2,560,9312,642,12981,198Est. avg improvement in C.S. & O.M. worker productivity2,560,9312,642,12981,198Est. avg improvement in Finance worker productivity2,560,9312,642,12981,198Est. avg improvement in HR worker productivity2,560,9312,642,12981,198Estimated reduction in premium freight shipments2,576,1562,606,60530,449Est. % reduction of incorrect orders2,584,4482,612,91828,470Annual Benefit Increases2,601,5302,601,5300Interest Rate2,601,5302,601,5300Revenue Sensitivity Analysis Outputs5 Year NPV2,827,104Parameters:Output D46 with low value from F28:F34 for parameter in D28:D34Output D46 with high value from G28:G34 for parameter in D28:D34Output Differences:Est. % improvement in close rate2,505,8632,975,924470,061Est. % improvement in sales travel efficiency2,598,2362,984,093385,857Est. % increase in price per order2,624,4392,960,811336,372Est. % decrease in order processing time2,635,4712,788,590153,119Est. incremental % of leads passed per C.S. worker2,727,7482,819,66191,912Est avg annual reduction in customer loss2,733,4082,748,37914,971Est. % improvement in customer satisfaction2,740,8942,740,8940

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Input Tornado

Key Revenue Parameters

CF & ROI Analysis

Key Savings Parameters

CostBenefit SummaryBusiness Case Spreadsheet (Template)Cash Flow & ROI Analysis5 Year NPV$2,827,1045 Year IRR60%Payback (Yrs.)1.6Project Name:Generic IT ProjectProject #:ASSUMPTIONS PER YEARYr 0Yr 1Yr 2Yr 3Yr 4Yr 5Yr 6Yr 7Yr 8Yr 9Yr 10TotalAssumptionsDiscount Rate15%Annual Cost Increases0%2.5%2.5%2.5%2.5%2.5%2.5%2.5%2.5%2.5%Annual Benefit Increases0%2.5%2.5%2.5%2.5%2.5%2.5%2.5%2.5%2.5%Corporate Tax Rate42%42%42%42%42%42%42%42%42%42%ONE TIME PROJECT COSTSYr 0Yr 1Yr 2Yr 3Yr 4Yr 5Yr 6Yr 7Yr 8Yr 9Yr 10TotalCapital Outlays(show as negative numbers)External Consulting Fees00Computer & Other Equipment(1,659,619)(1,659,619)Asset Category 300Asset Category 400Asset Category 500Sub-Total Capital Outlay(1,659,619)0000000000(1,659,619)One Time ExpensesExternal Consulting Fees(621,575)(621,575)Internal Personnel Costs(582,981)(582,981)IT Installation Costs00Sub-Total One Time Expenses(1,204,556)0000000000(1,204,556)Total Outlays(2,864,175)0000000000(2,864,175)EARNINGS IMPACTYr 0Yr 1Yr 2Yr 3Yr 4Yr 5Yr 6Yr 7Yr 8Yr 9Yr 10TotalProjected Costs(show as negative numbers)Depreciation(331,924)(331,924)(331,924)(331,924)(331,924)00000(1,659,619)On-going costs(1,240,720)(874,016)(670,740)(571,778)(531,886)(3,889,141)One Time Expenses(1,204,556)0000000000(1,204,556)Total Costs(1,204,556)(1,572,644)(1,205,940)(1,002,664)(903,702)(863,810)00000(6,753,316)Projected BenefitsAdditional on-going benefits1,908,8011,344,6401,031,907879,659818,2875,983,294Incremental contribution/profits1,918,2011,966,1562,015,3102,008,0252,039,4759,947,167Total Benefits3,827,0023,310,7963,047,2172,887,6842,857,762000005,983,294Net Projected Impact(1,204,556)2,254,3572,104,8562,044,5541,983,9821,993,95200000(770,022)Tax505,914(946,830)(884,040)(858,713)(833,272)(837,460)00000(4,360,314)Income After Tax(698,642)1,307,5271,220,8171,185,8411,150,7091,156,49200000(5,130,337)CASH FLOWYr 0Yr 1Yr 2Yr 3Yr 4Yr 5Yr 6Yr 7Yr 8Yr 9Yr 10TotalCapital Outlay(1,659,619)0000000000(1,659,619)One-time Exp. (after tax)(698,642)0000000000(698,642)Income After Tax1,307,5271,220,8171,185,8411,150,7091,156,492000006,021,386Depreciation331,924331,924331,924331,924331,924000001,659,619Net Cash Flow(2,358,261)1,639,4511,552,7401,517,7651,482,6331,488,416000005,322,744Discounted Cash Flows(2,358,261)1,425,6101,174,095997,955847,700740,0060.00.00.00.00.0Cumulative Discounted(2,358,261)(932,652)241,4431,239,3982,087,0982,827,1042,827,1042,827,1042,827,1042,827,1042,827,104Cumulative Nominal(2,358,261)(718,810)833,9302,351,6953,834,3285,322,7445,322,7445,322,7445,322,7445,322,7445,322,744012345678910DEPRECIATION AND INTEREST SCHEDULEBeginning BalanceCloseYr 1Yr 2Yr 3Yr 4Yr 5Yr 6Yr 7Yr 8Yr 9Yr 10TotalExternal Consulting Fees00000000000Computer & Other Equipment1,659,6191,659,6191,327,695995,771663,848331,92400000Asset Category 300000000000Asset Category 400000000000Asset Category 500000000000Total Outlay1,659,6191,659,6191,327,695995,771663,848331,92400000DepreciationLife (# of years)External Consulting Fees300000000000Computer & Other Equipment5331,924331,924331,924331,924331,924000001,659,619Asset Category 3300000000000Asset Category 4500000000000Asset Category 51000000000000Total Outlay331,924331,924331,924331,924331,924000001,659,619Ending BalanceExternal Consulting Fees00000000000Computer & Other Equipment1,659,6191,327,695995,771663,848331,924000000Asset Category 300000000000Asset Category 400000000000Asset Category 500000000000Total Outlay1,659,6191,327,695995,771663,848331,924000000Interest on Avg Balance126,96198,74770,53442,32014,10700000352,669Interest Rate8.5%

Fortera:In order for the Sensitivity analysis (tornado diagram) routine to work properly, all entries in this column must be "hard-coded" (ie., not calculated, not references to another cell).Fortera:In order for the Sensitivity analysis (tornado diagram) routine to work properly, all entries in this column must be "hard-coded" (ie., not calculated, not references to another cell).Fortera:In order for the Sensitivity analysis (tornado diagram) routine to work properly, all entries in this column must be "hard-coded" (ie., not calculated, not references to another cell).&LProject XXX Business Case Template&REnterprise Integration Toolkit&RPage &P of &NFortera:From Project Capital Tab, but not used in this template. Please consult with accounting on treatment as being able to depreciate this item.Fortera:from Project Capital TabFortera:From CostBenefit Summary Tab, Row 13Fortera:From CostBenefit Summary Tab, Row 14Fortera:From CostBenefit Summary Tab, Row 7Fortera:From CostBenefit Summary Tab, Row 8Fortera:From Inputs Sensitivity Tab, row 8Fortera:From Input Sensitivity Tab, row 4Fortera:From Input Sensitivity Tab, row 5Fortera:From Input Sensitivity Tab, row 6Fortera:From Input Sensitivity Tab, row 7Fortera:From CostBenefit Summary Tab, Rows10 through 12Fortera:From Depreciation & Interest Schedule below.

Project CapitalBusiness Case Spreadsheet (Template)Cost & Benefit SummaryGeneric IT ProjectLevel of Estimation*All rows must have an "x" in only one of the three columns below.123Year 0Year 1Year 2Year 3Year 4Year 5Avg.- BENEFITS -Incremental Revenuex0.0$1,908,801$1,344,640$1,031,907$879,659$818,287Incremental Cost Savingsx0.0$1,918,201$1,966,156$2,015,310$2,008,025$2,039,475- COSTS -Incremental Commissions & Cost of Salesx0.0$286,320$201,696$154,786$131,949$122,743Incremental Cost of Operationsx0.0$763,520$537,856$412,763$351,864$327,315Incremental SG&A Costx0.0$190,880$134,464$103,191$87,966$81,829External Project Expenses (Fees & Other Expenses)x$621,5750.00.00.00.00.0Internal Project Expenses (Personnel & Other Expenses)x$582,9810.00.00.00.00.0Gross Benefit$(1,204,556)$2,586,281$2,436,780$2,376,477$2,315,905$2,325,876$2,408,264Cumulative Gross Benefit$(1,204,556)$1,381,725$3,818,505$6,194,983$8,510,888$10,836,764* Level of Estimation Footnotes:1 - High level ("ballpark") estimates are typically based on preliminary research on similar projects, RFI responses and/or non-binding estimates.2 - Parametric estimates are typically based on in-depth research, RFP response and/or documented contractual obligation.3 - Actual costs and benefits as measured post-implementation for validation.

&LProject XXX Business Case Template&REnterprise Integration Toolkit&RPage &P of &NFortera:One-time consulting/ integration fees and associated travel & expenses from Project Expenses tab.Fortera:One-time, internal personnel costs for project time and associated travel and expenses from Project Expenses tab.Fortera:Incremental Sales, General & Administrative costs from New Ongoing Costs tab.Fortera:Incremental Cost of Operations from New Ongoing Costs tab.Fortera:Incremental Commissions & Cost of Sales from New Ongoing Costs tab.Fortera:Incremental Cost Savings from Savings tab.Fortera:Incremental Revenue from Revenue tab.Fortera:If more than one "x" is placed in a row, the logic in the table will default to the highest number column and, thus, is designed to provide the more accurate of the two estimations.

Project ExpensesBusiness Case Spreadsheet (Template)Project Capital ExpendituresLevel 1 - High Level EstimatesYear 0Year 1Year 2Year 3Year 4Year 5Total CapEx0.00.00.00.00.00.0BuildoutPCsServersNetwork ComponentsApplication Software LicenseOS/DB/Utilities Software LicensePremise-base Telecom Equip.Other InfrastructureLevel 2 - Parametric Estimates(Sample) Project Capital Expenditures For a New Call CenterNumber of sites requiredYear 0Year 1Year 2Year 3Year 4Year 51.00Total CapEx$1,659,6190.00.00.00.00.0VariablesCapEx Per SiteAgent Stations175$1,659,619Non-Agent Stations75Sq. Ft. (120 per seat)30000CapEx Cost/Seat$9,484One Time CapEx CostsUnit CostQuantityTotalBuildout$6,00030$180,000LAN Sub-TotalLAN Server (Novell)$6,7391$6,739$539,254Front end Cisco Router$10,0002$20,000100Mb Fault tolerance Transceiver$4,5001$4,500Voice Sub-TotalAccelar Backbone switch$35,0002$70,000$279,865Cisco Switch (24 port)$2,5009$22,500LAN Tape backup$3,4001$3,400Brick and Mortar Sub-TotalTapes$2040$800$840,500LAN Management workstations$3,0001$3,000Sniffer Network probe$17,0001$17,000HP Laser jet 4000$1,5001$1,500Fax server$4,8001$4,800PC Workstation$1,000250$250,000Surge protectors for PC's$14250$3,500Equipment racks$3001$300Tools, Tywraps, Labels$5001$500Novel 4.11 OS$40250$10,000Novell Gateway Sessions$5025$1,25010%Managewise LAN software$10,0001$10,000HP Openview$18,0001$18,000Optivity Switch management software$10,0001$10,000Cisco works$18,0001$18,000Remote access software$1,0001$1,000Attachmate for Windows$36025$9,00010%E-mail software$71250$17,750MSOffice$5001$500Communications line frame$3,0001$3,000Modems FRADS$5001$500Training equipment$5,0001$5,000SUN Sparc 250 IWS Intranet server$16,8651$16,865Intel based intranet server$4,0001$4,000Wiznet gateway$2,4001$2,400SUN Backup unit$2,2001$2,200IWS Backup tapes$2040$800Solaris License$1503$450SUN Sparc 250 IWS Intranet server$16,8651$16,865Lucent PBX0.010.0Cost per stationInstallation0.02000Paraphonics IVR$150,0001$150,000Genesis CTI Server$20,0001$20,000Open Client Sybase License$31,0003$93,000Furniture (Cubes)$2,000250$500,000Wiring for PC's and Cubes$120250$30,000Security System$75,0001$75,000Reception Area$20,0001$20,000Cafeteria$20,0001$20,000PC Installation$50250$12,500Data roomsetup$3,0001$3,000$1,659,619Level 3 - Actual ResultsYear 0Year 1Year 2Year 3Year 4Year 5Total CapEx0.00.00.00.00.00.0

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Incrtl Ongoing CostsBusiness Case Spreadsheet (Template)Project ExpensesExternal Project Expenses (Fees & Other Expenses)Internal Project Expenses (Personnel & Other Expenses)Level 1 - High Level EstimatesAssumptionsYear 0Year 1Year 2Year 3Year 4Year 5Year 0Year 1Year 2Year 3Year 4Year 5External Project Expenses (Fees & Other Expenses)0.00.00.00.00.00.0Internal Project Expenses (Personnel & Other Expenses)0.00.00.00.00.00.0Level 2 - Parametric EstimatesAssumptionsYear 0Year 1Year 2Year 3Year 4Year 5AssumptionsYear 0Year 1Year 2Year 3Year 4Year 5External Project Expenses (Fees & Other Expenses)$621,575Internal Project Expenses (Personnel & Other Expenses)$582,981External Fees Contingency15%$81,075Internal Project Costs Contingency15%$76,041PersonnelTravel & Expenses15%$70,500Travel & Expenses5%$24,140TravelIntegrator Fees(Daily Rate)$1,000$470,000Internal Labor Cost(Daily Cost)$340$482,800PersonnelCorresponding Government Cost Categories(From OMB Circular No. 76: Revised Supplemental Handbook, Performance of Commercial ActivitiesProject Work Breakdown Structure (WBS) forGeneric IT ProjectParticipants# OccurrencesEstimating FactorDuration (Days)FTEs% ExternalIntegrator FTEsClient FTEsProject NamePhase I1890.0470.01420.0Workstream 11220.0210.01010.0Task Package 1Task 143Meetings10120.050%60.060.0Task 225Tables20200.00%0.0200.0Task 3Task Package 2Task 143Meetings25300.050%150.0150.0Task 225Tables60600.00%0.0600.0Workstream 2670.0260.0410.0Task Package 1Task 143Meetings10120.050%60.060.0Task 225Tables35350.00%0.0350.0Task 325Sessions20200.0100%200.00.0Level 3 - Actual ResultsAssumptionsYear 0Year 1Year 2Year 3Year 4Year 5Year 0Year 1Year 2Year 3Year 4Year 5External Project Expenses (Fees & Other Expenses)0.00.00.00.00.00.0Internal Project Expenses (Personnel & Other Expenses)0.00.00.00.00.00.0


SavingsBusiness Case Spreadsheet (Template)Incremental Ongoing CostsLevel 1 - High Level EstimatesIncremental Commissions & Cost of SalesEstimated as percentage of revenues from prior operating financial data.- used in row 10 of CostBenefit Summary tabYear 0Year 1Year 2Year 3Year 4Year 5Estimate: Commissions & Cost of Sales0%15%15%15%15%15%Description of supporting research and data source(s):Incremental Cost of Operations- used in row 11 of CostBenefit Summary tabEstimated as percentage of revenues from prior operating financial data.Year 0Year 1Year 2Year 3Year 4Year 5Estimate: Cost of Operations0%40%40%40%40%40%Description of supporting research and data source(s):Incremental SG&A Cost- used in row 12 of CostBenefit Summary tabEstimated as percentage of revenues from prior operating financial data.Year 0Year 1Year 2Year 3Year 4Year 5Estimate: SG&A Cost0%10%10%10%10%10%Description of supporting research and data source(s):Level 2 - Parametric EstimatesIncremental Commissions & Cost of Sales- used in row 10 of CostBenefit Summary tab(Insert parametric estimates of Commissions & Cost of Sales sub-categories in this space.)Year 0Year 1Year 2Year 3Year 4Year 5Total Commissions & Cost of Sales0.00.00.00.00.00.0(Insert calculations in row above to sum sub-categories of parametric estimates of ongoing Commissions & Cost of Sales from rows in Level 2 section above.)Incremental Cost of Operations(Sample) Ongoing Operating Costs of a Call Center- used in row 11 of CostBenefit Summary tabYear 0Year 1Year 2Year 3Year 4Year 5Total Annual Cost of Operations0.0$15,037,991$13,770,359$13,770,359$13,770,359$13,770,359# SitesVariablesAdministrative Seats341.00Center Size (seats)250Training Seats41Sq. Ft. (120 per seat)30000Agent Seats70%175Turnover % - Annual60%250Benefits loading factor24%Operating Cost/SeatAnnual Operating Costs Per Site$52,521Variable - Year one$13,130,29147,450.64Variable - Out years$11,862,6597,630.80Fixed - Every year$1,907,700Year One Operating CostsOut Years Operating CostsCorresponding Government Cost CategoriesHeadcountSalary/ Cost per unitTotal Loaded CostHeadcountSalary/ Cost per unitTotal Loaded Cost(From OMB Circular No. 76: Revised Supplemental Handbook, Performance of Commercial ActivitiesVariable based on headcountVariable based on headcountPersonnelCenter Director1$70,000$86,800Center Director1$70,000$86,800PersonnelManagers2$57,324$142,164100ratioManagers2$57,324$142,164PersonnelSupervisors11$32,913$446,38320ratioSupervisors11$32,913$446,383PersonnelLeads9$28,198$314,69025ratioLeads9$28,198$314,690PersonnelAgents219$19,608$5,318,670$9.50Agents219$19,608$5,318,670PersonnelTech Support1$55,000$68,200Tech Support1$55,000$68,200PersonnelFacility Manager1$35,000$43,400Facility Manager1$35,000$43,400PersonnelWorkforce coordinator3$20,640$76,781Workforce coordinator3$20,640$76,781PersonnelAdmin2$20,640$51,187Admin2$20,640$51,187PersonnelHR Coordinator2$32,913$81,624HR Coordinator2$32,913$81,624PersonnelTrainers2$32,913$81,624Trainers2$32,913$81,624PersonnelInitial Recruiting253$1,500$379,031Initial Recruiting0$1,5000.0PersonnelInitial Hiring253$2,000$505,375Initial Hiring0$2,0000.0PersonnelInitial Training253$1,200$303,225Initial Training0$1,2000.0PersonnelRecruiting for Churn131$1,500$196,875Recruiting to cover churn131$1,500$196,875PersonnelChurn Hiring Fees131$2,000$262,500Churn Hiring Fees131$2,000$262,500PersonnelChurn Training Cost131$1,200$157,500Churn Training Cost131$1,200$157,500PersonnelVacation Exp.253$2,400$606,450Vacation Exp.253$2,400$606,450PersonnelBonus Exp.253$1,300$328,494Bonus Exp.253$1,300$328,494PersonnelService awards253$100$25,269Service awards253$100$25,269PersonnelIncent. Pay253$275$69,489Incent. Pay253$275$69,489PersonnelUnemployment taxes253$1,100$277,956Unemployment taxes253$1,100$277,956PersonnelPayroll taxes253$3,000$758,063Payroll taxes253$3,000$758,063PersonnelGrp. Medical Ins.253$4,200$1,061,288Grp. Medical Ins.253$4,200$1,061,288PersonnelPens. Plan contrib..253$480$121,290Pens. Plan contrib..253$480$121,290Personnel401K Contrib..253$4,050$1,023,384401K Contrib..253$4,050$1,023,384PersonnelSick pay exp.253$410$103,602Sick pay exp.253$410$103,602PersonnelOther EE Benefits2530.00.0Other EE Benefits2530.00.0PersonnelSeminars and classes2530.00.0Seminars and classes2530.00.0PersonnelEducational Reimb.253$410$103,602Educational Reimb.253$410$103,602PersonnelOther pers. Exp.253$140$35,376Other pers. Exp.253$140$35,376PersonnelTemp Help Days500$200$100,000$ 25.00 / hourTemp Help Days100$200$20,000PersonnelTotal$13,130,291Total$11,862,659Fixed Annual costs - every yearTravel and entertainmentTravelLodging24$200$4,800TravelAirfare8$800$6,400TravelRent Cars00.00.0TravelOther2530.00.0TravelMeals24$50$1,200TravelMeals-entertainment24$50$1,200TravelMeetings3$5,000$15,000TravelPostage253$75$18,952Materials & Supply CostsOffice supplies253$75$18,952Materials & Supply CostsStationary/forms253$0.50$126Materials & Supply CostsOffice eq.1$288,000$288,000Materials & Supply CostsRent- office eq.1$84,000$84,000Materials & Supply CostsDepreciation of PC's1$80,340$80,340DepreciationDepreciation of Furniture1$61,956$61,956DepreciationComputer supplies253$20$5,054Materials & Supply CostsHardware maintenance1$49,116$49,116Maintenance & RepairSoftware maintenance1$24,567$24,567Maintenance & RepairBank charges1$1,000$1,000Other CostsDues/subscriptions253$14$3,538Other CostsFacilities - rent30000$22$660,000RentUtilities30000$9.50$285,000UtilitiesFacil. Repair30000$4.20$126,000Maintenance & RepairOther Occ. Exp.30000$5.75$172,500InsuranceTotal$1,907,700Incremental SG&A Cost- used in row 12 of CostBenefit Summary tab(Insert parametric estimates of SG&A Cost sub-categories in this space.)Year 0Year 1Year 2Year 3Year 4Year 5Total Annual SG&A Costs0.00.00.00.00.00.0(Insert calculations in row above to sum sub-categories of parametric estimates of ongoing SG&A from rows in Level 2 section above.)Level 3 - Actual ResultsIncremental Commissions & Cost of Sales- used in row 10 of CostBenefit Summary tab(Insert quantification of actual Commissions & Cost of Sales sub-categories in this space.)Year 0Year 1Year 2Year 3Year 4Year 5Total Annual Commissions & Cost of Sales0.00.00.00.00.00.0(Insert calculations in row above to sum sub-categories of actual ongoing Commissions & Cost of Sales from rows in Level 3 section above.)Incremental Cost of Operations- used in row 11 of CostBenefit Summary tab(Insert quantification of actual Cost of Operations sub-categories in this space.)Year 0Year 1Year 2Year 3Year 4Year 5Total Annual Cost of Operations0.00.00.00.00.00.0(Insert calculations in row above to sum sub-categories of actual ongoing Cost of Operations from rows in Level 3 section above.)Incremental SG&A Cost- used in row 12 of CostBenefit Summary tab(Insert quantification of actual SG&A sub-categories in this space.)Year 0Year 1Year 2Year 3Year 4Year 5Total Annual SG&A Costs0.00.00.00.00.00.0(Insert calculations in row above to sum sub-categories of actual ongoing SG&A from rows in Level 3 section above.)

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RevenueBusiness Case Spreadsheet (Template)Savings Benefit EstimatesLevel 1 - High Level EstimatesYear 0Year 1Year 2Year 3Year 4Year 5(Insert high level cost savings sub-category estimates in this space.)Grand Total Cost Savings0.00.00.00.00.00.0(Insert calculations in row bove to sum sub-categories of high-level savings from rows in Level 1 section above.)Level 2 - Parametric EstimatesDept.DescriptionUnitsYR 1YR 2YR 3YR 4YR 5Total ImprovementPurchasingImprovement in efficiency of personnelEst. % improvement in Purchasing productivity10%10.0%10.0%10.0%10.0%Actual annual burdened cost of worker$40,000$41,000$42,025$43,076$44,153Avg number of workers in dept. using system1010101010Annual Cost Savings$40,000$41,000$42,025$43,076$44,153$210,253Better visibility of purchased product qualityAvg. annual number of purchase orders1,0001,0001,0001,0001,000Avg. P.O. amount$50,000$51,250$52,531$53,845$55,191Est. incremental % of comparable products identified10%10%10%10%10%Est. % improvement in price per P.O.10%10%10%10%10%Annual Cost Savings$500,000$512,500$525,313$538,445$551,906$2,628,164Better visibility of same vendor purchasesAvg. annual number of purchase orders1,000$1,000$1,000$1,000$1,000Avg. P.O. amount$50,000$51,250$52,531$50,000$50,000Est. incremental % of same vendor/same month orders10%10%10%10%10%Est. % improvement in volume discount15%15%15%15%15%Annual Cost Savings$750,000$768,750$787,969$750,000$750,000$3,806,719Total Purchasing$1,290,000$1,322,250$1,355,306$1,331,521$1,346,059$6,645,136Maintenance & RepairImprovement in efficiency of personnelEst. improvement in Maintenance & Repair worker productivity10%10.0%10.0%10.0%10.0%Actual annual burdened cost of worker$40,000$41,000$42,025$43,076$44,153Avg number of workers in dept. using system1010101010Annual Cost Savings$40,000$41,000$42,025$43,076$44,153$210,253PlaceholderActual00.00.00.00.0Actual1010101010Estimate10%10%10%10%10%Actual$30,000$30,000$30,000$30,000$30,000Annual Cost Savings0.00.00.00.00.00.0Total Maintenance & Repair$40,000$41,000$42,025$43,076$44,153$210,253Warehousing/Inventory ControlImprovement in efficiency of personnelEst. improvement in warehouse/inventory worker productivity10%10.0%10.0%10.0%10.0%Actual annual burdened cost of worker$40,000$41,000$42,025$43,076$44,153Actual number of workers in dept. using system1010101010Annual Cost Savings$40,000$41,000$42,025$43,076$44,153$210,253Reduced Carrying CostsEst. avg. reduction in # parts per warehouse10%10.0%10.0%10.0%10.0%Avg # parts per warehouse$10,00010,00010,00010,00010,000Actual # warehouses33333Avg annual carrying cost per part$25.43$26.07$26.72$27.39$28.07Annual Cost Savings$76,290$78,197$80,152$82,156$84,210$401,005Total Warehousing$116,290$119,197$122,177$125,232$128,362$611,258Logistics/ Shipping/ ReceivingImprovement in efficiency of personnelEst. improvement in Logistics worker productivity10%10.0%10.0%10.0%10.0%Actual annual burdened cost of worker$40,000$41,000$42,025$43,076$44,153Avg number of workers in dept. using system1010101010Annual Cost Savings$40,000$41,000$42,025$43,076$44,153$210,253Improvement in non-labor cost of work order handlingActual avg non-labor cost per work order$54.29$55.65$57.04$58.46$59.93Est. avg. reduction in cost per work order20%20.0%20.0%20.0%20.0%Actual annual number of work orders4,500$4,500$4,500$4,500$4,500Annual Cost Savings$48,861$50,083$51,335$52,618$53,933$256,829Reduce Premium FreightAvg annual shipments10,00010,00010,00010,00010,000Actual avg. cost per premium shipment$50.00$51.25$52.53$53.84$55.19Actual % of premium freight shipments10%10%10%10%10%Estimated reduction in premium freight shipments25%25%25%25%25%Annual Cost Savings$12,500$12,813$13,133$13,461$13,798$65,704Total Distribution$101,361$103,895$106,492$109,155$111,884$532,787Customer Service & Order Mgt.Improvement in efficiency of personnelEst. avg improvement in C.S. & O.M. worker productivity10%10.0%10.0%10.0%10.0%Actual annual burdened cost of worker$40,000$41,000$42,025$43,076$44,153Avg annual number of workers in dept. using system1010101010Annual Cost Savings$40,000$41,000$42,025$43,076$44,153$210,253Increased accuracy of ordersActual avg annual # customer orders2,2002,2002,2002,2002,200Avg annual % of orders that are incorrect10%10.0%10.0%10.0%10.0%Est. % reduction of incorrect orders50%50%50%50%50%Actual % returns of incorrect orders85%85%85%85%85%Avg cost to re-stock returns$300$308$315$323$331Annual Cost Savings$28,050$28,751$29,470$30,207$30,962$147,440Decreased customer complaint callsActual avg annual # customer complaint calls5,0005,0005,0005,0005,000Est. % reduction in complaint calls50%50%50%50%50%Avg cost per complaint call$25$25.63$26.27$26.92$27.60Annual Cost Savings$62,500$64,063$65,664$67,306$68,988$328,521Total Customer Service / Admin.$130,550$133,814$137,159$140,588$144,103$686,214Information SystemsImprovement in efficiency of personnelEst. avg improvement in IS worker productivity10%10.0%10.0%10.0%10.0%Actual avg burdened cost of worker$40,000$41,000$42,025$43,076$44,153Avg annual number of workers in dept. using system1010101010Annual Cost Savings$40,000$41,000$42,025$43,076$44,153$210,253Reduction in maintenance costs (consolidation)Est. # decommissioned systems33333Actual annual cost of software maintenance contracts per system$10,00010,25010,50610,76911,038Actual annual cost of hardware maintenance contracts per system$30,000$30,750$31,519$32,307$33,114Annual Cost Savings$120,000$123,000$126,075$129,227$132,458$630,759Total Information Systems$160,000$164,000$168,100$172,303$176,610$841,013Finance/ AccountingImprovement in efficiency of personnelEst. avg improvement in Finance worker productivity10%10.0%10.0%10.0%10.0%Actual annual burdened cost of worker$40,000$41,000$42,025$43,076$44,153Avg annual number of workers in dept. using system1010101010Annual Cost Savings$40,000$41,000$42,025$43,076$44,153$210,253PlaceholderActual00.00.00.00.0Actual1010101010Estimate10%0%0%0%0%Actual$30,000$30,000$30,000$30,000$30,000Annual Cost Savings0.00.00.00.00.00.0Total Finance & Accounting$40,000$41,000$42,025$43,076$44,153$210,253Human ResourcesImprovement in efficiency of personnelEst. avg improvement in HR worker productivity10%10.0%10.0%10.0%10.0%Actual annual burdened cost of worker$40,000$41,000$42,025$43,076$44,153Avg annual number of workers in dept. using system1010101010Annual Cost Savings$40,000$41,000$42,025$43,076$44,153$210,253PlaceholderActual00.00.00.00.0Actual1010101010Estimate10%0%0%0%0%Actual$30,000$30,000$30,000$30,000$30,000Annual Cost Savings0.00.00.00.00.00.0Total Human Resources$40,000$41,000$42,025$43,076$44,153$210,253Year 0Year 1Year 2Year 3Year 4Year 5Grand Total Cost Savings$1,918,201$1,966,156$2,015,310$2,008,025$2,039,475$9,947,167Level 3 - Actual ResultsYear 0Year 1Year 2Year 3Year 4Year 5(Insert actual cost savings sub-category quantification in this space.)Grand Total Cost Savings0.00.00.00.00.00.0(Insert calculations in row bove to sum sub-categories of actual savings from rows in Level 3 section above.)


BenefitsIDBusiness Case Spreadsheet (Template)Revenue Benefit EstimatesLevel 1 - High Level EstimatesYear 0Year 1Year 2Year 3Year 4Year 5(Insert high level revenue sub-category estimates in this space.)Grand Total Incremental Revenue0.00.00.00.00.00.0(Insert calculations in row above to sum sub-categories of high-level revenue estimates from rows in Level 1 section above.)Level 2 - Parametric EstimatesDept.DescriptionUnitsYR 1 Increased RevenuesYR 2 Increased RevenuesYR 3 Increased RevenuesYR 4 Increased RevenuesYR 5 Increased RevenuesTotal ImprovementSales & Marketing1Increased revenue per order1aAvg. annual customer orders2,2002,2002,2002,2002,200checkedActual price per order$2,000$2,100$2,205$2,315$2,431checked1bEst. % increase in price per order5%5.0%5.0%5.0%5.0%checkedAnnual Revenue Increase$220,000$231,000$242,550$254,678$267,411$1,215,639checked2Improved close rate2aAvg annual # of customer orders2,2002,2002,2002,2002,200checked2bCustomer order price$2,000$2,100$2,205$2,315$2,431checked2cAvg annual close rate72%72%72%72%72%checked2dEst. % improvement in close rate10%10%10%10%10%checkedAnnual Revenue Increase$316,800$332,640$349,272$366,736$385,072$1,750,520checked3Shortened processing time for ordersAnnual Est. Change3aAnnual customer orders2,2002,4202,5412,6052,637checked3bCustomer order price$2,000$2,100$2,205$2,315$2,431checked3dEst. % decrease in order processing time10%50%5.0%2.5%1.3%0.6%checked3eResulting incremental customer orders220121643316checkedAnnual Revenue Increase$440,000$254,100$140,073$75,377$40,067$949,617checked4Better efficiency for personnel who travelAnnual Est. Change4aEst. % improvement in sales travel efficiency10%50%5%3%1%1%checked4bAvg annual sales per rep$440,000484,000508,200520,905527,416checked4cAvg annual number of reps1010101010checkedAnnual Revenue Increase$440,000$242,000$127,050$65,113$32,964$907,127checked5Increase in Customer Retention5aAvg annual # of customers500500500500500checked5bAverage customer loss per year5%5.0%5.0%5.0%5.0%checked5cAverage annual revenue per existing customer$8,800$8,800$8,800$8,800$8,800checked5dEst avg annual reduction in customer loss10%10.0%10.0%10.0%10.0%checkedAnnual Revenue Increase$22,000$22,000$22,000$22,000$22,000$110,000checked6Total Sales & Marketing$1,438,800$1,081,740$880,945$783,903$747,515$4,932,902checkedCustomer Service & Order Mgt.6Improvement in market share due to customer satisfactionAnnual Est. Change# of existing customers500523521508488checked6aEst. % improvement in customer satisfaction10%50%5.0%2.5%1.3%0.6%checked6bAvg annual incremental customers50261363checked6cAverage annual revenue per existing customer$8,8008,8008,8008,8008,800checkedAnnual Revenue Increase$440,000$229,900$114,663$55,826$26,849$867,238checked7Incremental Sales Leads passed by Customer ServiceActual leads passed per C.S. worker150165182200220checked7aEst. incremental % of leads passed per C.S. worker10%10%10%10%10%checked7bAvg annual C.S. workers using new system1010101010checked7cAvg annual % leads that turn into deals10%10%10%10%10%checked7dAverage customer order size2,000$2,000$2,000$2,000$2,000checkedAnnual Revenue Increase$30,000$33,000$36,300$39,930$43,923$183,153checked8Total Customer Service / Admin.$470,001$262,900$150,963$95,756$70,772$1,050,391checkedYear 0Year 1Year 2Year 3Year 4Year 5Grand Total Benefit Sales, Mktg., C.S. & Admin.$1,908,801$1,344,640$1,031,907$879,659$818,287$5,983,294Level 3 - Actual ResultsDept.DescriptionUnitsYR 1 Increased RevenuesYR 2 Increased RevenuesYR 3 Increased RevenuesYR 4 Increased RevenuesYR 5 Increased RevenuesTotal Improvement(Insert actual revenue sub-category quantifications in this space.)Grand Total Incremental Revenue0.00.00.00.00.00.0(Insert calculations in row above to sum sub-categories of actual revenue quantification from rows in Level 3 section above.)


GlossaryBusiness Case Spreadsheet (Template)Sample Benefits Identification ModelBenefit CalculationsFinancial LeversOperational LeversCritical Success FactorsKey Performance Indicators (KPIs)Sales & MarketingPurchasingMaintenance & RepairWarehousing/Inventory ControlLogistics/ Shipping/ ReceivingCustomer Service & Order Mgt.Information SystemsFinance/ AccountingHR# of lost customersAvg cost per same size P.O.# days to fill an avg order# returns$ per work orderAvg $ of premium frieght cost/order# of complaint calls# IS personnel($/FTE) x FTEs saved = Reduction in labor$ annual maintenance contract cost($/system/maintenance agt.) x systems consolidated = Reduction in maintenance contract cost Improved Supply Chain visibility Improved order fill ratesAvg days for order fill% of orders filled in less than 1 day

&LProject XXX Business Case Template&REnterprise Integration Toolkit&RPage &P of &NEnterprise-WideValue CreationIncrease net operatingprofit after tax (NOPAT) (I/S)Improve capital allocation(B/S)CapitaldeploymentCost ofcapitalIncrease grossprofitDecrease operatingexpensesIncrease revenuesDecrease manufacturingcostsReduceselling costsReducedistribution costsReduceadministrative costsReduceR&DIncrease priceIncrease volumeImprove mixImprove processReduce cost of materialsImprove plant utilizationIncrease productivityDecrease staffingOptimize schedulingOptimize physical networkDecrease staffingLower Customer Service &Administration CostsLower I/S costsLower Finance/Acctg. costsLower HR costsImprove capital planning/ investment processReduce inventoriesReduce A/P increase A/RN/AUse alternative distributionProfit-driven sales efforts: Offer right mix Improve tactical pricing management Focus on high-profit accounts Reduced sales management layers Optimal manufacturing processes Most profitable capacity allocation/utilization Improved inventory flow visibility Lower transportation costs Higher facilities utilization Less firefighting, more accurate planningBetter carrier evaluation /mgmt. Improved Customer Service access to information More consistent service Faster problem resolution Lower C.S. cost Improved Admin. access to information - Significantly lower G&A "overhead"Improved capital stewardship Increased capital productivity Reduced inventory investment & carrying costs Reduced receivables investment

Business Case Spreadsheet (Template)GlossaryMethod/MetricDefinition/Brief DescriptionUseNet Present Value (NPV)is the sum of the discounted (at the cost of capital) cash flows of the project.To compare projects using a common cost of capital or discount rate. NPV does not explicitly reflect the uncertainty of the cash flow forecasts.Internal Rate of Return (IRR)is the discount rate, which when applied to the cash flows of the project produces a NPV equal to zero.IRR provides a uniform measure for evaluating different projects. It is a special case of NPV.Payback Period (aka Breakeven)is the length of time required for the sum of the net cash flows of the project to equal zero.Used to compare projects in terms of time to produce positive nominal results. Many organizations will not undertake projects which take longer than x years to "pay for themselves"Parameteris an estimate or assumption provided as input.Allows user to tailor the business case template to the specific project at hand.tornado diagramis a set of calculations and a chart summarizing the relative influence of various parameters on the defined output cell.Provides preliminary analysis of the sensitivity or relative strength of influence of a parameter provided in 3 point (Minimum, Best Estimate, Maximum) range. Allows easy visualization of parameters that carry the most influence in a model's outcome. In the Business Case Template, NPV is typically used as the best measure of BCT outcome.


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Business Case Spreadsheet IRR