4.2 What Is a Business Case?

A business case for an internal consulting role, or for anything that you wish to have sanctioned by management, is a written document that clearly delineates the need for what you are seeking and provides an explanation of the value that can be attained by getting agreement to proceed. Suppose that you have a pump that is continually failing, causing interruptions to the manufacturing process and loss of profit. In this instance, your business case would explain the loss to the company with specific supporting data. It also would provide a detailed estimate of the cost of replacement, showing that it was less expensive over the long term to buy a new pump than to keep repairing the old one.  

Another example of the reasoning behind a business case lies with a group reorganization. For our example, let’s consider reorganizing from a decentralized maintenance organization to one that is centralized—all of the mechanics are dispatched from a central scheduling location rather than being assigned out into the production areas. This is a major change for an organization. A business case will serve to explain the reasoning behind the change and the benefits that the change will deliver to the organization. In this case, the work crews would be assigned to plant-wide priorities vs. those of the individual production areas, which may not be high priority across the plant.

The business case for internal consulting is far more difficult than getting permission to buy a new pump or to reorganize the department. The reason for this is that most of what an internal consulting function delivers is either intangible or is a process that enables other process changes that, in turn, can deliver the bottom-line value that management usually seeks. However, if you wish to have the internal consulting role sanctioned and supported, a business case is absolutely required.  

Suppose the outcome of an internal consulting initiative was improved communications between Production and Maintenance. In this example, the poor communications between the two groups was hampering reliability of the equipment as well as the effective- ness and efficiency of both organizations with relation to maintenance repair. Through the consulting initiative, the root-cause reasons for the poor communication were discovered and corrected, leading to improvements in both reliability and maintenance effectiveness.  

The value attained through improved communication between Maintenance and Operations can be measured and built into the business case for the initiative. However, how do you measure and quantify the value delivered by having an internal consultant support the work effort? Everyone recognizes the value of internal consulting, yet it remains an intangible. In fact, some would say that value was not added at all and the improvement would have been achieved with or without the internal consultant’s presence. Therefore, an internal consultantbusiness case is required; otherwise, the role that the internal consultant plays could easily be overlooked or minimized.

4.3 The Components

A sound business case needs to addresses itself to six key elements. Some business cases address all of these elements, others just a few. How many you address depends on what you are trying to justify. The six elements of a business case are:

• Resource reduction

• Resource re-deployment

• Reduction in external spending

• Revenue enhancement

• Other efficiency and effectiveness gains

• Intangibles

Let’s briefly discuss how you would use the six element model to justify an internal consulting role within your company.

Resource Reduction

Many companies get into a position where they have to go through resource reductions. Lost contracts may reduce the need for the current workforce. The company may face required cutbacks, or even fighting for the very survival of the plant. Working on a resource reduction initiative can be extremely difficult for someone who is an integral part of the plant workforce. I Internal consultants can be used because they understand the big picture, can be somewhat objective, and are in tune with the needs of the plant personnel. They can have a positive effect on the work processes and what needs to be done to keep the work flowing after the change. They can also work with the organization to help minimize the overall impact on the process and the people. Those leading the organization are too busy orchestrating the change, and external consultants are viewed as outsiders. Although resource reduction occurs infrequently, internal consultants can clearly help minimize the impact.

Resource Re-deployment

Redeployment of resources is much more likely than a force reduction. In fact, the majority of work process changes involve some sort of redeployment of the existing resources. Because the internal consultants are very involved with process changes, they serve a critical role in resource redeployment as well. Once again, the site leadership is too involved in the actual day-to-day tasks associated with the change. It is therefore up to the internal consultants to work closely with the site personnel to assure that the resources are correctly deployed to support the change initiative.  

Several years ago, I was involved in a work process redesign which moved the organization from decentralized to centralized planning and scheduling. As part of this effort, there also was a need to integrate the maintenance crews who, to this point, had spent years in their own work areas. These crews seldom if ever communicated with one another. The original plan was just to bring the crews together into the centralized area, but still dispatch them without changing the crew mix. As an internal consultant, I explained the longer-term value of mixing the crews, thereby allowing the total knowledge of the group to expand. Had I not added this value, a significant opportunity would have been lost to the organization as they redeployed.

Reduction in External Spending

Internal consultants can also add value by showing how improved effectiveness and efficiency of the in-house workforce or in-house work processes can reduce external spending on contractor support. As work process initiatives are put into place, those immediately involved often fail to see that there are new and different ways to perform the work. They also fail to see that, if these new techniques were put into place, the spending on contractors and other third-party organizations can be reduced or even eliminated. This is an area where internal consultants working with the organization can help them adopt new techniques and reduce their external spending.  

Suppose the maintenance organization has 100 people performing craft work within the plant at an effectiveness rate of 40%. Also suppose that due to the workload the same plant has a contractor workforce staffed to augment the in-house organization. If you, as an internal consultant working with the site personnel, are able to improve effectiveness by 10%, you will help the plant raise productivity by 80 hours per day, 400 hours per week, or approximately 2000 hours per year. With this increased productivity, you would be able to reduce the contractor workforce by 250 mandays per year—a significant reduction in external spending.

Revenue Enhancement –

Internal consultants can help improve the revenue of a plant. For example, take any of the reliability initiatives in which an internal consultant can become involved. When successfully delivered, each of these will increase the reliability of the equipment, thereby enabling the plant to meet the demands of the marketplace better. Think about plants that operate 24 hours per day, seven days per week. These plants typically do not have the ability to make up for lost production as a result of equipment failure. Hence, unplanned shutdowns cost money. By supporting improved reliability initiatives, internal consultants support a site’s ability to enhance its revenue stream.

Other Efficiency and Effectiveness Gains

The work of internal consultants has the ability to deliver intangible benefits centered in the area of soft skills, also known as the eight elements of change. These elements—leadership, work process, structure, group learning, technology, communications, interrelationships, and rewards—are all key components of inter- nal consulting initiatives. Yet they are almost impossible to quantify as you can with the first four components of the internal consultantbusiness case. Nevertheless, they are of critical importance. Positive changes in any or all of them will deliver immense benefit to the organization. These are the elements we will discuss in the next chapter. They also have been discussed in my other two books: Successfully Managing Change in Organizations: A Users Guide and Improving Maintenance & Reliability Through Culture Change.

Intangibles

As you will learn in Chapter 5, there is another component of the change process that, along with soft skills, is often overlooked in the development and deployment of change initiatives. This component is the organization’s culture, made up of four elements— organizational values, role models, rites and rituals, and the organization’s infrastructure. The organization’s culture is an intangible component of every change initiative. As an internal consultant, you can make sure that the culture and the related impact on the culture from any change initiative are addressed and not allowed to undermine the effort.