Build a Business Case for Online Learning Projects
By Saul Carliner

Upper-level decision makers seem to thrive on "what if?" Here's how it works: Line workers, managers, and independent consultants enthusiastically propose a project, and executives shred it apart with "what ifs?" and "have you considereds?"

In reality, such questions indicate that a project proposal is incomplete. The people who prepared it may have assumed an overly optimistic or pessimistic result, overlooked relevant alternatives, or may not have considered relevant component costs. And when it comes to technology projects--such as online learning development--executives may kick "what if" into high gear. Though the benefits of such projects seem self-evident to the converted, the possibility of a high price tag and organizational disruption sobers many executives considering the online plunge.

Know your business-case building blocks
A business case is a request for project investment project. It's not a project plan; that comes later. The business case identifies the costs and returns of a proposed project and compares it to other possible investments.

Want to increase your chances of project acceptance? Prepare a complete, persuasive business case. Here's how to do it.

1. Provide a rationale.
Present a succinct description of the proposed online learning project. Doing so serves two purposes. One, it reassures the sponsor that you understand the request. Two, business cases are occasionally distributed outside the organization for review, so a description helps familiarize outsiders with the project.

2. List all constraints and criteria.
List all constraints affecting the project, such as schedule and budget. You should also list quality constraints. For an online learning program, for instance, a course developed for commercial use may need to be of a higher visual quality than one developed for internal-use only.

For technical constraints, consider the requirements for authoring systems (some organizations use Authorware only, for example), and delivery (how will users actually take this course?). Finally, list and prioritize criteria for alternative solutions. For instance, of schedule, cost, and quality--which is most important?

See Elements of a Business Case for a sample list of constraint costs.

3. Present relevant alternatives.
Research all options, then show how each addresses the project constraints and criteria. For an online learning program, that may mean researching traditional classroom training and instructional television, for example.

4. Investigate all component costs.
Component costs may include instructional design services, authoring software, and training registration fees. Many learning project proposals inadvertently omit one or more of these costs. For example, development costs for classroom courses are admittedly lower than those for most online learning projects, but delivery costs are much higher. Some business cases focus on development costs. Others omit key delivery costs, such as the reduced time usually required to take online learning courses.

You should provide realistic estimates of component costs based on your research. Use salary surveys to calculate labor costs, and contact publishers and resellers to estimate software costs. List costs in a table so that potential sponsors can compare component costs for each alternative side-by-side. Note, too, that some costs are not financial. Anticipate responses to each alternative, and address them in the business case. See Elements of a Business Case for a comprehensive list of sample component costs for online learning projects. Also, the Sample Comparison of Delivery Options presents two project options and their component costs and benefits.

5. Provide realistic return projections.
So often, business cases present one projected return, and that often represents a best-case scenario. For example, a course proposal might assume one level of enrollment, though that might range from low to high, in reality. Instead, you should present three or four potential outcomes, including a worst- and best-case scenario.

You should base revenue estimates on market rates. Rates for specialty training, such as technical training, often differ from commodity training, such as professional development. Similarly, you can use several pricing models for estimating online learning revenues, such as tuition by the course, monthly subscription, or site license.

Another flaw of some online learning business cases is projecting near 100 percent enrollment. That level of enrollment rarely occurs. Rather, you should base future enrollments on past performance. In the absence of such numbers, assume conservatively. For internal courses, assume that 10 to 60 percent of your learning audience might take a course. For external courses, assume that 1 to 10 percent might sign up for courses.

6. Keep it simple.
When possible, explain technical concepts in terms familiar to the potential sponsor. Language can create a barrier to technology, so never assume that your audience knows what you do. If the sponsor cannot understand a proposal, he or she can't support it.

7. Acknowledge sponsors' needs.
Sponsors often initiate a proposal request by identifying project requirements. In some instances, they also outline solution components. Consider these components project requirements, much like a "drop dead" date in a schedule or a "not to exceed" amount for a proposed budget.

In some instances, the solution the sponsor proposes may not be in his or her best interest. Propose it as one option, then propose your alternative and explain why that one better addresses the problem. For example, suppose a sponsor declares that an online learning program must be completed in four months, but based on your understanding of the project and the current status of the material, you believe that it will take six months. Propose a schedule that assumes the project will be completed in four months, but also propose a "what if" schedule with a six-month timetable. This way, you acknowledge the sponsor's needs and demonstrate that you listen.

8. Make a recommendation.
When you recommend a course of action, reiterate the full cost of the project, the range of potential benefits, and the human issues to consider when implementing a solution. Just as a mutual fund prospectus is intended to help convince a potential customer to invest, so a business case is intended to convince a sponsor to invest in your project.

Admittedly, each sponsor responds to different concerns and presentation styles. But by repeating the rationale, listing the constraints and criteria, researching all possible alternatives, providing a complete list of component, projecting a range of benefits for each alternative, providing adequate explanation, and acknowledging the sponsors' needs, you are likely to have a ready answer should an executive play "what if" the next time you present a business case.

Published: February 2000