Business Case for Indirect Sales - How a business case can work as a tool for generating support for a change project

Abstract: Background and the Situation at Company X To remain competitive, it is essential for companies to take advantage of new business opportunities. However, seizing new opportunities often imply changes within the organization, and projects associated with change are bound to encounter resistance. To efficiently manage change and thereby avoid resistance and engage in measures that generate support for change, is therefore important in order to successfully address an opportunity. As change is always unique, no generic tools for managing change exist. However, in order to generate support it is essential to clearly communicate the impact and benefits of a project, which a business case (BC) is a common tool for. Company X has identified the indirect sales channel, where products are sold through partners, as an opportunity to increase sales. Certain regions within Company X utilize an indirect sales channel today, however the majority of the regions solely sell products directly to end customers. Increasing the use of partners as an extended sales force is a way of reaching new customers and broadening the customer base. In order to address this opportunity the Indirect Sales Program (IS Program) has been formed. The IS Program aims at establishing and expanding indirect sales in all regions, and the program is currently developing a new indirect sales IV model including tools and processes that enable regions to efficiently sell products via partners. Problem Discussion All regions within Company X are responsible for their own business decisions, and to make the decision of establishing indirect sales would imply many changes for the regional organization. Also, most regions lack a general understanding of the IS Program, the indirect sales model, and the benefits of establishing an indirect sales channel. There is an uncertainty of which processes to put in place, what personnel to involve, and the amount of resources to allocate. In order to successfully establish indirect sales, the IS program therefore needs to convince the regions to actively support and implement the indirect sales model. A business case that communicates the opportunity of the indirect sales channel as well as its associated benefits and costs is consequently needed. Purpose The purpose of this study was to explore how a business case can work as a tool for generating support for a change project. In order to achieve the purpose, a business case concerning indirect sales was developed for the IS Program. The business case was implemented in collaboration with a region and its ability to generate support was analyzed. Methodology The project started with a literature study. Thereafter a regional business case concerning the indirect sales channel at Company X was developed through adherence to the literature study. The business case was created as two parts; a guide and a financial model. The business case’s ability to generate support was tested through a regional implementation, and and analyzed in a theoretical context. Thereafter conclusions were drawn. Frame of Reference The frame of reference introduces three theoretical fields. The first field grants the reader an understanding of different sales channels, and more specifically the indirect sales channel. The second field discusses business cases in general and emphasizes the business case format. This field was used to structure the empirics and the business case development. The third field concerns resistance to change and underlines what initiators of a change project should do to generate support for a project. This field was primarily used when analyzing the indirect sales business case’s ability to generate support, however it also served as inspiration when developing the business case. The frame of reference ends with a framework illustrating how the theoretical fields are applied. Conclusions and Recommendations A business case can work as an efficient tool for generating support for a change project, as the indirect sales business case had a good ability to generate support from decision makers and implementers. However, a business case’s ability to generate support is limited by the capabilities of those developing and implementing it. They have to convey its message in a convincing way and communicate the business case appropriately. When using a business case as a tool for generating support for a change project it is essential to identify possible uncertainties associated with the change project, and to define if and how the business case can clarify these uncertainties. It is also crucial to devote time to communicate its content, and involve stakeholders and implementers in the business case development. The indirect sales business case’s ability to generate organizational wide support could be enhanced by incorporating more information concerning employees’ roles in the indirect sales business. The business case can be improved with regards to risk assessments, investment alternatives, and performance appraisal systems. The business case was intended to be generic. It has however been concluded that it can never be truly generic since all regional circumstances could not be accounted for. As a recommendation to Company X, the implementation process should be a collaborative process involving the IS Program and regional representatives. The implementation should be an iterative process where the implementation process and the business case are continuously improved.