Adding value each day

Do you have a winning business case template?

In this post I share my article published in the PAiE Newsletter of April 2013.


A few months ago, I was involved in a project on whether the company I work for should facilitate employees to work from home. For a medium-sized contact centre like ours, the issue is somewhat more complex than simply taking our laptops home and working away merrily using an RSA token. Representing the finance department in the project team meant making sure that we had a good business case. But what makes a business case a good one?

In short, I would say that a good business case is not necessarily a positive one, but one that is complete and informative. It contains relevant and timely information and considers most scenarios and risks. It also links the inputs and outputs to the current and future organization.

So I went off in search of a template in the company. I looked for one that facilitates collecting and structuring data and converting it into business information, on the basis of which management can make a sound decision. However, I found that we did not have a template at all. I suspect this is not a unique problem, but one that is inherent to SME’s.

In our company, business decisions are usually made based on power point presentations prepared by individual project managers. That is not necessarily a bad thing, but a standard template can be useful for setting an appropriate level of internal control for each business decision. It functions as a checklist to examine all important aspects of a business case. In my experience, business cases often do not include: (i) a risk analysis, (ii) a current scenario, i.e. what if we leave things unchanged, or (iii) an evaluation using real options, i.e. including the costs and benefits of future business developments that will only arise if the business case is implemented.

With a little help from Google, I produced a template that looks like this:

Section A: Executive summary

Section B: Establishing the business need

Section C: Relationship to organization’s vision and strategy

Section D: Consideration and selection of options

Section E: Financial analysis

Section F: Acquisition and implementation strategy

Section G: Review and approval

Section H: Appendix: terms, definitions, acronyms

A business case stands or falls depending on the executive summary on page one. As Guy Kawasaki states on OPEN Forum ( “If [the business plan] isn’t fantastic, eyeball-sucking and pulse-altering, people won’t read beyond it.” The executive summary is of course the section that management reads. It should make the reader feel informed and in control. Further sections are important for the process and analysis itself. They serve as a reference and a platform to present data and information.

Section B sets forth the problem or opportunity, the objective and scope. It can include background information and a description of the status quo. These details are usually covered well in business cases.

In Section C, the author puts the business case in its context, covering organizational, strategic, tactical and operational aspects. Business decisions always enable or disable objectives to be achieved. They influence future decisions and can be thought of as real options. The impact of those decisions is significant in most cases and must be considered. If you are not familiar with real options, try

Section D addresses all potential scenarios. I find that a table format facilitates comparison and I summarize the specifics of each scenario in a table that presents: (i) a benefit analysis (including major stakeholders), (ii) incremental revenues versus costs, (iii) major risks and likelihood of them arising. The tables include the outcome of analyzing all scenarios. A description of each scenario complements the tables and includes assumptions, constraints, risk management actions and impact. I highlight the recommended option.

Section E is where we as finance staff usually excel. I present the benefits (e.g. incremental revenues and cost reduction), the incremental costs (e.g. productivity decrease, efficiency losses) and the evaluation of the two separately. This forces the project team to think of all possible effects. I use various appraisal techniques: (i) NPV and (ii) payback for better understanding within the team and (iii) ROI and (iv) IRR for readers with greater financial acumen. A subsection on funding concludes the financial analysis.

Action lists, purchase steps and implementation are covered in section F. This is where project managers flourish. Notwithstanding the emphasis placed in finance and management literature on the control phase for business cases – the mechanism to measure the costs and benefits and evaluate the business case following implementation – this is never covered in the power point presentations I have seen. In my view, the inclusion of post-implementation measures in this section is essential.

What do you think of this business case template? Do you think it would work in your organization? Why not share your thoughts via the PAiE LinkedIn group (see the Contact column for the link)?

You might also want to browse around for posts by Guy Kawasaki, the author of the best-seller “Enchantment”.

Wishing you good business cases for 2013!


Juggling with hats in the finance function – do you have the right skills to become a successful CFO/Controller?

The article below has been published in the PAiE newsletter 2012 December edition.

Some 65 of us who attended the technical meeting in September took home valuable lessons from Rick Payne. Indeed, what functions should a finance manager, controller or CFO fulfil? And what personal traits are needed for success?

 He kicked off with a few famous words.

 “We expect a finance manager in an operating company….to wear three hats… the first as a financial expert, the second as an active (not a non-playing) member of the management team and the third as the manager of the finance and accounting staff…”
(S.R. Harding, Deputy Controller, Royal Dutch Shell Group, 1963)

 During his presentation we were presented with a framework that ICAEW has defined to clarify and visualize the activities performed in the finance function and to explore the tensions they create. For further details see

The different areas of the finance function are interconnected but serve different purposes and may even contradict each other. This made me think how we all juggle with our hats during our daily finance operations and raised many questions and action points for improvement. 

Let’s say when you make a capex decision, do you always put on all your hats? Do you consider the relevant risks and strategic appropriateness? Do you put your funding hat on to decide on financing? Are you aware of the right treatment from a tax compliance point of view? Does your accounting hat fit and do you check and apply IFRS correctly? And don’t forget that management and control hat of yours—is it well-kept and does it attest to your skills and influence? And all this under time pressure and limited resources?

To address such challenges effectively and to operate efficiently, we have some strategic choices to make in our own organisations. Our finance teams should be composed to contribute to the ultimate goal of the firm.

The organisational structure must be right: the position of the finance team in the corporate hierarchy should enable us to focus on finance activities that add value. We as accountants, finance managers, CFOs and controllers must observe and understand the business, where the contributions are stemming from and what the organisation’s goals are.

As for an effective finance function we need to get the right people on board by careful selection. We also need to keep them motivated and energised by investing time and discipline in training, coaching and incentivising our staff. As for our own success, we need to develop a commercial/entrepreneurial spirit and be willing to take risks and propose business initiatives.

 We must define and adopt the right culture in the finance team, how do we do things; what values do we hold? Do we walk the talk?

 Our routines, processes and the IT infrastructure should support and not hold us back. We should focus on leveraging our capabilities and making our processes lean, eliminating all waste and standardising our processes to minimum output deviation. Do you measure and benchmark your team’s performance, or your own?

 Our finance team may even need its own vision, mission and strategy which should all derive from and contribute to the firm’s own. We must develop strategic ability, a long term vision to put finance decisions into strategic context. Perhaps not surprisingly, very few people in the room raised their hand when asked whether their finance teams do have their own strategy or vision. We all learnt something here.

 How often do you check and refine the long-term vision and contribution of your own function or that of your finance team? We all tend to say that we are a sparring partner for the business. Let’s admit it—aren’t we somewhat biased here? Do we continuously and relentlessly collect feedback from counterparties and our process customers on how we could make their job and decisions easier or more effective? Do we keep communicating? Do people hear us and get our message? Do we have the drive and persuasiveness to get the organisation to follow us? Are we an inspiring bunch of people?

As Rick Payne said, we should have a clear understanding of how far our function and team have progressed and which direction we are heading. To make the leap and become a successful CFO or controller we need more than the accounting, treasury, management and internal control expertise we’ve accumulated.

 We need to build relationships with senior management, investors and all other stakeholders. We must develop and enhance our skills to bring effectiveness to our finance departments and juggle those hats optimally.

Why do we need business model frameworks in private life?

Just a week ago, I spoke to my fellow iEMFC students about my conviction of using business models in life scenarios.

I started with a representative research asking who plays any music, who has learnt to play music? For my surprise, about 80% of us raised a hand. When asking who has played the violin? No hands remained up in the air.

So I started my speech.

I went to an elementary school with a great attention to musical education. Maybe I haven’t talked to you all about this but I learnt to play the violin, the piano, sang in choir (Controllers can read music sheets even without having a good voice). Still today a great fan of  music all from Chopin piano concertos, Pavarotti areas to Lady Gaga. (YESS, I did go to her concert in Arnhem in 2010…)

On my first week in school, I discussed with the music teacher while sitting in front of the school cafeteria about what musical instrument I would like to play. Without hesitation I snapped: violin. Why the violin, she asked back. Well, I responded, this is trivial, violin is what my Mum used to play.

When I look back today, I know back then I selected one of the most difficult musical instruments to learn. First of all, you need to stand while practicing for endless hours. You actually need a stamina of a professional athlete. Then you need to hold your left arm though I am right-handed in a crazy, twisted position, bringing your elbow forward. Then you need to hold a beautiful, elegant and otherwise delicate piece of wood that is after 2 minutes is as heavy as dining table seating 10?

So you are holding the violin, your neck hurts crazy as you try to balance the violin between your chin and your shoulder, the strings are biting deep into the tissues of your fingertips, your concentrating that the smooth movement in your right wrist is flawless and you try to do the vibrato? You know when the violin makes the sound as if you were playing professionally.

So I never got to the point of playing nicely at a level that one could enjoy, despite the several years of family wide efforts (me crying that I had to practise, my parents and my sister crying from the noise I make when practising)…

Being among  friends now I shall admit that I had the most fun of playing the violin was when I was waxing the bow with the shiny fossil-like amber wax always pretending as it would contain some prehistoric treasures or when I could blow the whistles pretending to tune the strings.

As soon as the political situation, i.e. the relationship with my parents and better results from school allowed, I stopped with my violin lessons.

And why am I saying this?

I would like to highlight the implication of Management Accounting (“MA”) framework we learnt the last week. When you get a question which may have an impact on your life, remember you are a Controller. You had MA lectures in Boston. You learnt Michael Kraten’s framework.

For a new venture, house, studies, hobbies or a new job opportunity, or you just want to publish your book, you need a plan and you need to check if that fits with the current package of yourself. Do we have strategic match? If I may call Ottavio’s words here: is it who I am and who I want to be? (Did playing the violin fit my long-term ambitions? uhh…) 

Bingo if the plan fits into long-term ultimate life goals.

Then as we heard from Michael Kraten, the second step in the model is V for volume, in other words you need to check if your supply capacity matches the expected demand. As Frank said last week, you need to ask the question, do you have enough energy and time? Can you supply them in a sustainable way?

What we also heard from Michael is that we need to collect evidence, do a basic survey on volume.

Let me return to my personal music story.

I have to admit, still today I have not asked my mum how she did with violin, if she liked it, why she gave up (I am sure she did although we never really discussed this).

I never asked my father or my sister who is older than me what he thinks about me playing any musical instruments.

I never asked my music teachers what they think if this instrument or music as such is matching me.

I never asked for trial period or let’s say pilot upon which I could commit to a decision.

Then you need to know the costs what the new venture holds. How much time taken away from your loved ones? Does it cost them any pain or frustration? Do they spend more time commuting, not having time to meet their friends? How would you value that? Regarding the financial cost analysis part I am sure we’ll all do well on.

Then rushing to the R in the framework, what do I gain? How will I benefit? I know it is tricky to measure happiness, being content or have a piece of mind. Will also my friends and family benefit? On a long-term only? How do I put that into context?

After that test, include all your stakeholders, colleagues, friends and family, is it worth it? What is the WACC for you? And for your friends and family? Does your new venture still make sense?

Then the most important part finally, how do you manage the risks in investments in life? You may take out an insurance or outsource a project in your firm but how would that come to a failing marriage, missed birthday parties, cancelled holidays with friends, postponing meeting your parents?

Remember, you need to answer all these questions yourselves.

Good luck with your private business plans.

Hope you are going to make optimal decisions not like me with the violin (or the piano…).

Keep in mind!  Business model 2012 Boston!

Thank you.

Social media and event promotion

Posted in event promotion,social media by lfarkas on January 11, 2012
Tags: , , , ,

Revamp your CV

Posted in getting a new job,your CV by lfarkas on June 19, 2011
Tags: , ,
 A great article from Mashable on how the job winning CV could look like inspired by social media developments.

We have heard that if you are in the film industry, put your CV in a popcorn sachet full of popcorn when handing it in. Not bad. But what shall we do if we are not in the film industry?

I believe from this post everyone can get ideas regardless you are a professional welder or a credit control clerk.

Example from Mashable


Posted in getting a new job,on the interview by lfarkas on June 19, 2011
Tags: , , ,

I have found a rather informative website with possible questions that can come up on an interview.

There is an explanation of approach and an example answer to many of the questions.

The list is almost endless. I do not think you need anything else in general topic though you may want to consider asking questions to yourself based on your CV, the job profile and the organisation you apply to.

on Reporting

Posted in Reporting by lfarkas on June 19, 2011
Tags: , , , , , ,

Here I collect some links that show relevant information, ideas, tips and tricks in the Reporting subject.

Annual report


A recent publication from the Financial Reporting Council who is the Uk’s independent regulator responsible for promoting high quality corporate governance and reporting to foster investment.

The message of the document is

  1. Understand well for whom your report is prepared.
  2. Invest enough time in planning your report.
  3. You need disclosure only if the information is critical / essential / fundamental / important / key / main / major / primary / principal / significant. Otherwise it is CLUTTER.
  4. Keep the CSR within boundaries.
  5. Do not lament on Corporate Governance. You are supposed to explain only in case you do not adhere to the UK Corporate Governance Code. If you do, just confirm.
  6. Great examples on how to present Governance, Accounting policies and Share-based payments. Check out page 34 – 39. 

Where does it always go wrong?

Posted in Management by lfarkas on May 28, 2011
Tags: , , , , ,

A reminder on why change processes fail via

The first point mentioned is too much complacency. True. Why is that our human nature is just inclined to put up with things which we, at first, challenge with enthusiasm, at second, challenge with less enthusiasm still riding on the waive that we are successful and have powers and energy to change? Then at third, we are just not bothered to question any more.

why can’t we keep up the motivation and energy we had the first time? Is it that we lose interest? Is it that we are programmed for short-term thinking and quick gains and have no patience to drive long-term sucesses? Is it that we are distracted with new challenges? Is it that we recognise that a further failure is expected and we do not want our ego to get another dent?  Is it that we see this example from others and we accomodate? Is it that our colleagues, friends and family get annoyed by us? Or are we in simple words lazy?

I would like to believe that it is a combination of these forces. I would like to believe that we are not complacent because we are lazy. I decided that I shall never get annoyed with someone who is not complacent. One shall be careful when challenging his environment that he does not seem agressive or too assertive. I’ll not consider a failure as a dent but as a signal that next time I shall proceed somehow differently and tailor my solution to get closer to my goal.

To eliminate distraction, I think focusing on maximum 4 issues at a time and not adding another until the first 4 are resolved, could be the right approach. By setting and seeing a clear goal on the long term and knowing what we want to achieve, should enforce long-term thinking and loss of interest.

On motivation and interest, the inevitable solution is passion.  Maybe some more on passion next time.

In the meantime, a reminder to Kotter’s change phases:

  1. Establish a sense of urgency
  2. Create a coalition
  3. Develop a clear vision
  4. Share the vision
  5. Empower people to clear obstacles
  6. Secure short term wins
  7. Consolidate and keep moving
  8. Anchor the change

And a video of Kotter introducing his book, Our iceberg is melting, an amazingly simple and great read on change.