Business Cases from Discovery Research & Contextual Inquiries

At the heart of every new innovation project is a business case. To invest in any new technology, teams must first convince stakeholders that the investment will improve the business. There is no better way to get these insights than by doing discovery research composed of contextual inquiries, user interviews, observations, surveys and user journey mapping. 

It’s true that staggering transformation failure rates, upwards of 70%, can trace their roots back to poorly defined and unrealistic business cases. Frequently, these business cases are not based on discovery research, they are based on faulty assumptions about business challenges, user needs, technology appropriateness, and overall value. Discovery research is the best way to work from facts, validate assumptions, and start projects off on the right track. 

By doing this research, you will see the real challenges facing the business today, the value that can be captured by transforming them tomorrow, and the technology you’ll need to get there. 

Basic Anatomy of a Business Case

The bird’s eye view below shows that business cases contain two facets: soft and hard benefits. While companies are always after hard benefits, it is absolutely true that in some circumstances, soft benefits can outweigh the hard benefits. Projects can even be funded purely on the soft benefits. Do not ignore them. Too often, analysts exclusively focus on hard benefits while ignoring the soft. 

Good business cases:

• Accurately estimate the magnitude of business challenges, and the value in opportunity to improve them 

• Clearly communicate all the solution’s soft and hard benefits 

• Enable teams to determine the total acceptable spend on a solution to hit the target ROI 

• Are the basis of defining requirements so that all functions and features can be mapped to their corresponding value

A Step-by-Step Guide to Better Business Cases

While the concept of building business cases may seem easy, making business cases can be intricate. These steps are not intended to be comprehensive. The intent is to show how user research provides unequivocal value to business cases.   

If your business cases are not based on deep insights about the personas and their challenges, chances are your business case is full of assumptions.     

Take these steps to improve the business case for your next innovation project:

Step 1: Define the Business Objectives

This may be the most important step. Innovation should always be guided by business objectives, and a vision for where the organization is headed. Defining objectives and tying them to the vision, up front, will guide teams on where to focus their energy when doing the discovery research. Business objectives provide answers to questions such as: 

• Which parts of the user journey are most important to examine?

• What types of questions should we ask during interviews and surveys?

• Which personas do we need to interview?  

• Which cost variables matter for the business case? 

• How will the user journey need to change and transform in the future? 

• What technologies will be appropriate for the project? 

When working through the questions above, always ask: is this relevant to the objectives? Will this help us achieve the objectives?

At this early stage, objectives should be tied towards strategic business outcomes, not tactical implementation of a solution--that will come far later after solutions have been identified.

Examples of business objectives we often help with at Daito: 

• Increase sales through digital channels by 20% 

• Reduce average handle time 7%

• Reduce order fulfillment time by 10% 

• Reduce operational cost by using digital technology

• Improve work order execution speed, and reduce human error with digital technology

• Improve efficiency and team productivity to double output within 5 years 

Step 2: Conduct Contextual Inquiries and Discovery Research to Map the User Journey

Use the objectives to determine which work streams, user journeys, activities, and personas matter to the project. Conduct contextual inquiries, user observations, and user interviews to map an accurate and realistic current state user journey. Good user journeys should contain personas, workflows, environments, and technologies needed to get work done effectively, at a level of detail appropriate to satisfy the business objectives. They should also identify business and user challenges, and benchmark their level of severity. Reducing the severity of these challenges will be a key selling point in the business case.

An example of a fictitious user journey is given below. The journey is of field technicians collecting data from a meter. Let's assume the objective is to have the most efficient, and leanest, operation possible for field meter data collection. 

Step 3: Pinpoint the Challenges Along the User Journey & Quantify their Volume, Frequency & Severity. 

Pinpointing the challenges means identifying all of the user and business pain points that matter to the project. 

There can be a multitude of challenges and improvements areas. Teams can get lost in the details and pursue the wrong points of interest during this phase. Referring back to the business objectives will provide guidance on what challenges are relevant, the level of detail that is sufficient, and will provide a safeguard against distractions. 

For the example below, because the objective is to have the most efficient, and leanest operation possible, many challenges and pain points are around things that cause inefficiencies, errors, delays, and that negatively impact decision making.

Step 4: Calculate Current Costs per Challenge Item

This step can feel more like an art than a science as costs can come in many forms. For example, extended ‘time on task’ from using antiquated technology, cost of errors, cost from unused resources and technology, or cost from missed sales, can all be valid scenarios in a business case. 

Knowing which variables matter really depends on project objectives, and the future state the innovation team is trying to create. If an objective is to improve efficiency, then anything that can accelerate the process should be on the table.

Now is the time to review the user journey in detail, and itemize all the cost variables that matter to the project. 

The example below are variables based on extracted steps from the user journey above. The journey mapping revealed that considerable time was spent transcribing information into the Enterprise Asset Management (EAM) software at the end of each day. Additionally, considerable time was spent waiting on manager and human reviews of work. Both steps in the process can be prone to error, leading to additional inefficiencies.  

Both of these tasks can be made obsolete by leveraging more modern technology. Also, user interviews revealed the workforce does not enjoy these two steps. Employees are requesting that field data be collected digitally, so that there is no need for transcription at the end of each day. A strong case can be made for optimizing these phases of the workflow. And because the workforce wants to collect meter data digitally, adoption will likely be high, with little resistance.

An important piece of any digital transformation project is identifying whether new technology can replace old technology. Technology substitutions are are very tangible hard ROI that should be included in the business case.

As shown below, the journey mapping also revealed that employees have company issued phones, but still carry company issued Walkie Talkies for field communications. Employees don’t like carrying extra equipment, and most have already, informally, transitioned to their phones for field communications. In this case, phones can replace Walkie Talkies.

Last, the user journey also revealed that the only reason technicians visit the field offices is for morning meetings, and to transcribe data at the end of each day.

Because an objective is to have a lean operation, it may be possible to close some field offices by enabling employees to have virtual meetings, and upload meter data to the EAM from their phones.

Don’t go through these calculations alone. Work with end users and stakeholders to capture accurate estimates for each cost variable. It is important to be as accurate and realistic as possible. Getting good numbers can be an iterative process. Don’t be surprised if you have to revise the user journey based on follow up conversations, or if you need to pull reports and do data mining to get good current-state numbers. 

Step 5: Dream up the Future State: Apply Design Thinking to Challenge areas with Colleagues, and End-Users

This is where design thinking comes into play. Once the known challenges are identified, itemized, and quantified, think through the future vision with stakeholders: How can we improve the end user and organizational performance by leveraging the latest technologies? 

Now is the time to brainstorm and dream. For example, if it is high effort for a technician to collect data from the field, and then travel back to the office to transcribe paperwork, can this be done simpler, with better technology and processes? If so, how much simpler can it be? What technology will be needed? What specific features and functions will the technology need to have? 

The examples below are an extension of the ones above. Let's assume that an idea from design thinking was using smart meters to collect and transmit data. However, an early analysis revealed that replacing current meters with smart meters was not financially feasible in the short term. 

Thus, the agreed upon solutions from the design thinking workshops are given below. 

By applying the ideas above. The future state user journey is given below.

Step 6: Calculate the Expected Difference Between the Current & Future States for Each Challenge Item  

The difference between the current state and future state in dollars represents the total value created by the transformation project. The value for each variable will have to be calculated, as show below, and then summed.

After calculating the difference between the current and future state user journeys, you now have a business case for transformation. If you followed all the steps, this business case will also be the foundation for defining requirements, and setting design and user experience goals. For example, if the business case is built around the future state of reducing 1 hour from an activity, then ux designers and engineers should work toward engineering that outcome. Usability testing should be done during the design phases to confirm whether the 1 hr reduction will be achieved.

These future state parameters should also be used to guide the team in selecting the right technology. Proof of concepts and pilot studies should be evaluated and judged on whether they meet the criteria specified in the future state. 

For example, if a given technology is not likely to reduce time on task by one hour on average, then it should be redesigned, replaced, or the business case should be adjusted to reflect reality.

Important Considerations

The goal was to cover the basics and give a broad overview of how discovery research and contextual inquiries can form the foundation of business cases. Based on the examples given, it can be easy to assume that transformation is about cost cutting. A cost cutting perspective is a very narrow perspective. 

Transformation is about increasing the capacity for business expansion. This is done, in large part, by making every company’s most valuable asset--people--more capable. Productivity lifts because the job becomes easier to do. Less time is spend on mundane tasks, and more time is spent on value added work. This allows the workforce to accomplish more in the same amount of time.

Take the solar energy industry for example. Solar field technicians are one of the top 15 fastest growing jobs in the U.S.A right now. And yet, the solar industry’s biggest challenge is that demand is outpacing the human ability to deliver. Through effective transformation, companies can increase every employee’s ability to accomplish more, thereby growing the business, meeting demand, and exceeding expectations. 

Conclusion

Business cases are an important part of the overall transformation effort, and there is no  better way to build a business case than by basing it on discovery research and deep insights about end users and business operations. 

While the examples given may seem straightforward, business cases can be difficult to put together and require lots of multidisciplinary collaboration. We help businesses make strong business cases that are foundational to requirements definition, buy vs. build analyses, digital roadmapping, sprint planning, and agile development. 

After years of tackling these issues, Daito has developed a formula that dramatically cuts the failure rates of transformation projects, and speeds up their delivery. With careful exploration, proper technology selection, and best in class user experience design, we help companies evolve.