The business case can be explained as a process of carefully analyzing the project stages, financial investment, opportunities, and alternatives available to propose the most suitable action plan to thrive business value.
A business case tends to inform the company about what might happen if it proceeds with a particular investment decision. A thoughtfully considered document is formulated as the business plan, which sets out the validations and logical reasoning to persuade a decision-maker to accept the investing decision.
The purpose of a business case is to assist the organization in articulating new projects, innovations, and changes. It is a critical foundation for any business to enjoy the accomplishment of new projects with the involvement of seniors and strategic leaders.
The formal definition of a business case is a document used to provide justification and rationale for taking up a new program, project, or portfolio. The document appraises the costs of investment, benefits, and risks of other alternatives available and delivers strong reasoning to support the proposed solution.
Five distinctive elements make up a business case:
We have already discussed how a business case justifies investment decisions. The contents of a business case include the executive summary, mission statement, product or service, project definition, and project organization.
Without a solid business case before commencing your project, there is an increased chance of failure. You may also refer to the business case as the project plan or charter. However, it may only be an irrelevant document unless you can anchor your business case close to reality. In short, a business case should be the document to align the project to the all-encompassing goals of the organization.
The research process for a business case involves exploring the project's who, what, how, and why, which needs to be coherently communicated to stakeholders. While the business case elements may help you address the ‘why’, you need to emphasize more on the details more. After all, the document will serve as a reference throughout the project.
The following section outlines the four stages of writing an all-inclusive business case.
When creating a new project, it is important to identify its ultimate goal or target. Most new projects are commenced to solve a targeted business problem. Alternatively, a business case could be designed to find a new business opportunity.
As you recognize the business problem, ‘leading with the need’ is the most significant action. Identifying the problem requires you to describe and explain it, explore its origins and respond to it within the required time frame. When considering the time frame, it is important to conduct rigorous economic research to analyze the competitive landscape.
The next step is to identify the best possible solution to the business problem. It goes without a doubt that the process is challenging, and you might be unable to work your way out through unfounded assumptions. You can narrow down the options by examining the proposed alternative solutions and quantifying their benefits. Forecasting costs for each solution is also important, followed by a reasonable estimate of its feasibility. Each solution should be carefully evaluated by determining the risks and opportunities for each. Ultimately, all the findings should be adequately documented and embedded within the business case.
Before ranking the possible solutions, you should ideally work towards setting up appropriate criteria. This is important to prioritize your solutions and identify the best ones for the project. You can follow some of these tips for prioritizing:
The process should be thoroughly embedded within the business case, and the outcome is simple: the most optimal solution is scoring the greatest.
Everything is done now, and you are left with one last step: convincing your stakeholders. This is perhaps where you best understand the need for documentation. It is a valuable tool to convince stakeholders that your project delivers a practical, step-by-step approach to finding solutions.
So, you’ve identified your business problem or opportunity and how to reach it; now, you have to convince your stakeholders that you’re right and have the best way to implement a process to achieve your goals. That’s why documentation is so important; it offers a practical path to solve your identified core problem.
Here, we would like to answer some of the most frequently asked questions about business cases.
1. What is included in a business case?
The executive summary for the project, the project definition, the overarching vision and objectives, project scope, background information, stakeholder requirements, success criteria, plan, estimated schedule, budget, communication strategies, financial/investment appraisal, market, competitor, and SWOT analysis, risk appraisal and marketing strategy can be included in a business case.
It is a document designed to produce justification and reasoning for starting a new project.
A business case is used to adopt an organized approach for critically evaluating options, phases, and investment appraisal for a project.
A business case may be required in one of the following situations: