Define a Business Case
A business case brings together the benefits, disadvantages, costs, and risks of the current situation and future vision so that executive management can decide if the new project should go ahead.
When to Use a Business Case
The business case is needed when resource or expenditure on a project has to be justified. Approval is usually sought from the project sponsor and other interested parties.
For instance, the finance function may authorize funds and the IT department provides resources.
Is the Project Worth Doing?
Why are you starting a project?
Probably you’re doing it because you need to solve a problem.
Usually, the problem is something that gets in the way of achieving your goals. So it seems a project is about achieving goals and your goals won’t be realized unless you deal with the problem (or opportunity or circumstance).
If a project is worth doing you need to answer 4 simple questions:
- What is your goal?
- What’s stopping you from reaching the goal?
- How much change is needed to overcome the problem?
- Are you certain this will solve the problem?
Now, can you answer these questions quickly? Do you have evidence to support or refute your assumptions?
If not, it may not be worth starting a project.
Crafting a Business Case
The purpose of the business case is communication. Therefore, each section should be written in the parlance of the intended audience.
Moreover, it should only contain enough information to help decision making. When writing a business case, keep the following in mind:
- The document should be brief and convey only the bare essentials,
- Make it interesting, clear and concise,
- Eliminate conjecture and minimize jargon,
- Describe your vision of the future,
- Demonstrate the value and benefits the project brings to the business, and
- Keep the number of authors to a minimum to ensure consistent style and readability.
The project sponsor is responsible for preparing the business case. However, all appropriate team members should contribute to its development. Likewise, subject matter experts from other functions ― finance, HR, IT, service delivery, and so on ― can provide specialist information.
What’s more, those writing the business case should have a thorough understanding of the project’s aims and be able to merge the varied and potentially complex plans into one document using the following business case template.
The Business Case Template
What follows are the four steps to preparing a perfect business case template for your project.
It includes the following four sections:
- Executive Summary
- Project Definition
- Project Organization
|Section||Section Heading||Question Answered|
|2.1||Financial Appraisal||How much?|
|2.2||Sensitivity Analysis||How much?|
|3.3||Benefits and Limitations||Why?|
|3.4||Option Identification and Selection||What?|
|3.5||Scope, Impact, and Interdependencies||What?|
|3.6||Outline Plan||What? When? Who?|
|4.1||Project Governance||How? Who?|
In this article we showed you the main points of writing a proper business case. The most important point is that the business case should be concise and to the point. Therefore, keep the intended audience in mind when preparing each section and include supporting information in an appendix. This will enable you to outline effectively the business rationale for undertaking a project.