A business case captures the business justification for initiating a task or project. Clearly whenever an organisation plans to commit finance or resources to a task or project, it should be in support of a demonstrable business need. Organisations should make use of a business case to:
- Demonstrate the business need for a given action;
- Confirm that a project is feasible before expending significant funding;
- Consider the strategic internal and external drivers for the project; and
- Assess, compare and contrast the costs and benefits (both monetary and non-monetary) of choosing one course of action over another.
Developing a Business Case
The process of developing the business case is important; a well-executed process enables you to develop a solid business case that increases the benefits and value and reduces the risks. This also leads to a much greater likelihood of securing support to proceed with the investment.
Here are the five key steps for creating the business case.
Step 1: Confirm the opportunity: Describe the situation and the business opportunity that your proposal will impact. This will include the background to project, the investment logic and the high-level business requirements.
Step 2: Analyse and develop shortlisted options: Identify the alternative approaches and select three or four options to analyse. Gather information about each alternative, analyse the options and develop the shortlisted options.
Step 3: Evaluate the options: Evaluate how the alternatives will deliver on the business objectives, then select the preferred option, taking into account the strategic and financial value created and the risks.
Step 4: Implementation strategy: Create the implementation plan for the preferred option, detailing how to achieve the business objectives, who will be accountable for each milestone, and how to mitigate the project risks.
Step 5: Recommendation: Confirm the recommended option. Create the business case documents and present the business case recommendation to the board and management team for approval to proceed.