Delivering the Business Case for Learning and Development
Depending on the organization in which the learning practitioner works, it may be necessary to provide leaders with a business case for learning interventions. If a strategic management approach to learning and development is going to be adopted, then building a business case for learning and development interventions is a necessary component. However, regardless of whether a business case is required or not, it is recommended that learning practitioners become comfortable with examining learning and development from a commercial perspective. Furthermore, if the learning practitioner wants to change the conversation about budgets from being allocated a budget to one where programs are fully funded because business leaders believe they will deliver a return on investment (ROI), then being able to write a robust business case is fundamental to learning and development practice.
A business case forces the learning practitioner to think beyond the operational requirements of the learning and development function and consider the reasons why the proposed intervention adds value to the organization and supports the organization’s goals. Furthermore, it changes the focus to a client-facing consideration of the reasons why business leaders will resist or support the proposal. A business case provides the opportunity for the learning practitioner to establish credibility among business leaders, demonstrate their expertise in the field of learning and development, develop their knowledge and experience of evaluating the external and internal environment, and cultivate a capability to establish learning and development strategies in response to diagnostic data.
A robust business case contains a number of facets; it provides a rationale for why a learning and development intervention or program is needed within the context of supporting the organization in achieving its organizational strategic goal. A second component involves explaining what business problem or opportunity exists which can be resolved by a learning and development intervention, with a review of the benefits and costs of different options available. The final element is to provide a recommendation for action.
The first consideration in writing a business case is to determine what it is that business leaders require for a positive decision to be made regarding the allocation of financial resources. This will include considerations regarding the financial impact of the proposed intervention including the following:
- Cost outlay versus cash flow
- ROI
- Payback period
- Performance outcomes
- Impact on operation improvement
- Potential revenue impact
- The risk of failure
The task of the learning practitioner is to convince business leaders to allocate resources to learning and development by demonstrating that their proposed solution has a high likelihood of success. This means that the business case must include key pieces of information, which demonstrate that the learning practitioner has considered all the success factors pertinent to the circumstances including the following:
- Evidence that the solution has been employed successfully before
- An analysis of critical success and failure factors
- The impact of environmental factors that are pertinent to the proposed intervention
- Learning and development resource availability including talent, capability, technology, and capacity
- The financial impacts including revenue, payback, and cost
- Measure of success
- Calculation of anticipated ROI
- How the intervention or program contributes to the achievement of the organization’s strategy
- Possible additional funding, for example, government schemes
Sections in a Business Case
There are plenty of resources regarding formats for the development of a business cases and some organizations have standard templates that are used which should be adopted if available. Below is an outline of sections, which make up a comprehensive business case.
Section 1—Executive Summary
Although this is the first section of the business case, it will be the final section that is written. The executive summary summarizes the other sections of the document and briefly outlines the problem or opportunity, which the learning and development intervention will resolve, a recommended solution, with a concise overview of alternatives and the reasons they have been discarded, and finally a plan for implementation. A detailed implementation plan can be included as an appendix to the business case to explain major program phases, resource deployment, and program management.
Section 2—Business Problem or Opportunity
This section sets the scene for business leaders by describing what the business need is for a learning and development intervention. This can be defined in terms of a problem or opportunity that needs to be resolved. The use of hard statistical data gathered during the development needs analysis (DNA) provides evidence of the current situation and provides the basis for developing the ROI in regards to identifying the areas that performance outcomes, operation improvement, or impact on business results can be delivered.
Section 3—Environmental Analysis
This section contains pertinent data collected during the DNA phase, which provide evidence to support the conclusions drawn and establish the need for a learning and development intervention. The data analysis provided needs to be focused on the areas, which relate specifically to the identified business problem or opportunity. For example:
- Cultural change needed to deliver the organization strategy
- Issues in specific areas of the business operations
- Turnover or absence data indicating managerial development needs
- Areas of the organization where a skills shortage is having an impact on operations
- Opportunities created by the introduction of new technology
- Competitor activity that requires a shift in service delivery
- Training requirements driven by regulatory or legal changes
Section 4—Problem Analysis
This section involves clarifying the underlying problem or opportunity, which will be addressed through the implementation of the learning and development intervention and the organizational impact of the problem or opportunity. This may include a clear deadline for when the problem needs to be resolved especially with the introduction of a new regulatory framework or where a specific opportunity is only available during a set time frame. The analysis will also include what has caused the problem to exist, or evidence that the opportunity is real in order to contextualize the problem for the business leaders. Finally, evidence will be provided outlining the impact that addressing the problem or opportunity will have on the organization.
Section 5—Options
This section explores the alternate options that could be utilized to resolve the identified problem or opportunity. Each solution option will be described alongside a benefit analysis, estimated costs and possible funding sources, feasibility study, risk analysis, and assumptions. It is worth noting that doing nothing is an option that needs to be included. At this stage, it may be difficult to ascertain what benefit may be derived from doing something in regards to a learning and development intervention. A good rule of thumb is to propose a 1 percent improvement either in terms of increased profitability or cost efficiency. High priority issues should also be identified in regards to factors, which might prevent the proposed solution from delivering the identified benefits.
Section 6—Recommended Option
This section is a simple tabulation of the various options presented and ranking all the options against the benefits, costs, feasibility, risks, and impact identified in Section 5. This section also includes a brief summary explaining the main reasons why the option is being recommended ahead of the other options.
Summary
- If a strategic management approach to learning and development is going to be adopted, then building a business case for learning and development interventions is a necessary component.
- A business case changes the conversation from budget allocation to one where programs are fully funded because business leaders believe they will deliver a ROI.
- The first consideration in writing a business case is to determine what it is that business leaders require for a positive decision to be made regarding the allocation of financial resources.
- The task of the learning practitioner is to convince business leaders to allocate resources to learning and development by demonstrating that their proposed solution has a high likelihood of success.
- A comprehensive business case includes executive summary, business problem or opportunity, environmental analysis, problem analysis, options, and recommended option.