What is a Business Case?
A Business Case justifies the start-up of a project. It includes a description of the business problem or opportunity, the costs and benefits of each alternative solution, and the recommended solution for approval. A business case captures the reasoning for initiating a project or task. It is often presented in a well-structured written document, but may also sometimes come in the form of a short verbal argument or presentation. The logic of the business case is that, whenever resources such as money or effort are consumed, they should be in support of a specific business need. Business case is that better performance would improve customer satisfaction, require less task processing time, or reduce system maintenance costs. A compelling business case adequately captures both the quantifiable and unquantifiable characteristics of a proposed project.
Business cases can range from comprehensive and highly structured, as required by formal project management methodologies, to informal and brief. Information included in a formal business case could be the background of the project, the expected business benefits, the options considered (with reasons for rejecting or carrying forward each option), the expected costs of the project, a gap analysis and the expected risks.
When do I use a Business Case?
A Business Case Template is used whenever the expenditure on a project has to be justified. Completing a Business Case Template is usually the first step in the Project Life Cycle. Once the Business Case Template has been completed, it is presented to a Sponsor for approval. The Business Case is referred to frequently during the project, to determine whether it is currently on track. And at the end of the project, success is measured against the ability to meet the objectives defined in the Business Case. So the completion of a Business Case is critical to the success of the project.
What are the three roles of a business case?
The writing of the business case forces the team to sit back and reflect on all of the work they have so diligently completed. It is far too easy for the team to continue to plug away toward the end result and fail to document the work they've already accomplished. This is especially true during the concept and design stages of any project. Therefore, the business case serves as a wake-up call to the team causing them to capture the knowledge they've developed about how the business will function both with and without the final solution.
The second role of the business case is to verify that the solution substantiates or meets the needs of the business, and is the vehicle for receiving funding and approval to move forward. It provides a vehicle for the team to step back and subjectively review their facts and assumptions. In addition, it is vital that the team document what would happen to the business if the project is not undertaken. This base case or "do nothing" scenario is the foundation upon which all benefits from the effort are derived. By documenting everything together in one story, it is easy to link the issues to the solution and the benefit, and identify where the business would be without the project. The development of the overall business case simplifies the development of the financial justification, and will usually identify holes or problems with the solution. Moreover, you now have a way to measure your success. This analysis also is useful for your leadership team to prioritize this project against the many other initiatives in the business that may require capital investment.
The final important role that the business case plays is to provide a consistent message to many different audiences. It is a high level view of the entire project and enables all organizations affected by the effort (customers, management, operations, research & development, service, sales, accounting, finance, etc.) to be knowledgeable about the project.
Objectives
The business case process should be designed to be:
§ adaptable - tailored to the size and risk of the proposal
§ consistent - the same basic business issues are addressed by every project
§ business oriented - concerned with the business capabilities and impact, rather than having a technical focus
§ comprehensive - includes all factors relevant to a complete evaluation
§ understandable - the contents are clearly relevant, logical and, although demanding, are simple to complete and evaluate
§ measurable - all key aspects can be quantified so their achievement can be tracked and measured
§ transparent - key elements can be justified directly
§ accountable - accountabilities and commitments for the delivery of benefits and management of costs are clear.
The principal purposes of the formal business case process are:
§ introduce a way of thinking that causes people with the authority to recommend projects to firstly consider their value, risk and relative priority as a fundamental element of submitting the project proposal
§ require those proposing a project to justify its value to the firm and to self-cull any proposals that are not of demonstrable value
§ enable management to determine if the project proposed is of value to the business and achievable compared to the relative merits of alternative proposals.
§ enable management to objectively measure the subsequent achievement of the business case’s benefits.
Business cases can range from comprehensive and highly structured, as required by formal project management methodologies, to informal and brief. Information included in a formal business case could be the background of the project, the expected business benefits, the options considered (with reasons for rejecting or carrying forward each option), the expected costs of the project, a gap analysis and the expected risks.
When do I use a Business Case?
A Business Case Template is used whenever the expenditure on a project has to be justified. Completing a Business Case Template is usually the first step in the Project Life Cycle. Once the Business Case Template has been completed, it is presented to a Sponsor for approval. The Business Case is referred to frequently during the project, to determine whether it is currently on track. And at the end of the project, success is measured against the ability to meet the objectives defined in the Business Case. So the completion of a Business Case is critical to the success of the project.
What are the three roles of a business case?
The writing of the business case forces the team to sit back and reflect on all of the work they have so diligently completed. It is far too easy for the team to continue to plug away toward the end result and fail to document the work they've already accomplished. This is especially true during the concept and design stages of any project. Therefore, the business case serves as a wake-up call to the team causing them to capture the knowledge they've developed about how the business will function both with and without the final solution.
The second role of the business case is to verify that the solution substantiates or meets the needs of the business, and is the vehicle for receiving funding and approval to move forward. It provides a vehicle for the team to step back and subjectively review their facts and assumptions. In addition, it is vital that the team document what would happen to the business if the project is not undertaken. This base case or "do nothing" scenario is the foundation upon which all benefits from the effort are derived. By documenting everything together in one story, it is easy to link the issues to the solution and the benefit, and identify where the business would be without the project. The development of the overall business case simplifies the development of the financial justification, and will usually identify holes or problems with the solution. Moreover, you now have a way to measure your success. This analysis also is useful for your leadership team to prioritize this project against the many other initiatives in the business that may require capital investment.
The final important role that the business case plays is to provide a consistent message to many different audiences. It is a high level view of the entire project and enables all organizations affected by the effort (customers, management, operations, research & development, service, sales, accounting, finance, etc.) to be knowledgeable about the project.
Objectives
The business case process should be designed to be:
§ adaptable - tailored to the size and risk of the proposal
§ consistent - the same basic business issues are addressed by every project
§ business oriented - concerned with the business capabilities and impact, rather than having a technical focus
§ comprehensive - includes all factors relevant to a complete evaluation
§ understandable - the contents are clearly relevant, logical and, although demanding, are simple to complete and evaluate
§ measurable - all key aspects can be quantified so their achievement can be tracked and measured
§ transparent - key elements can be justified directly
§ accountable - accountabilities and commitments for the delivery of benefits and management of costs are clear.
The principal purposes of the formal business case process are:
§ introduce a way of thinking that causes people with the authority to recommend projects to firstly consider their value, risk and relative priority as a fundamental element of submitting the project proposal
§ require those proposing a project to justify its value to the firm and to self-cull any proposals that are not of demonstrable value
§ enable management to determine if the project proposed is of value to the business and achievable compared to the relative merits of alternative proposals.
§ enable management to objectively measure the subsequent achievement of the business case’s benefits.
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