Business Case Analysis for Project Management

Business Case Analysis for Project Management

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A business case takes the rationalization of an idea or purpose for starting a project or operation. It may be presented in a well structured written document, however it can also come from a concise verbal offer or proposal. This document is used as a means to explain the benefits and advantages of a specific business venture and why that particular venture is better than all other similar ventures currently on the market. It provides details regarding the time and money involved in opening and maintaining the business and other pertinent information that will aid the lender or hiring decision maker in making the best decision possible. There are many different types of business case available and they all have varying levels of difficulty.

The benefits section is the most difficult part of the entire business case because there are a great number of factors involved with determining what these benefits will actually be and how these benefits will be obtained. Every business change will have a set of expected benefits that are necessary for a successful conclusion and funding request. In most cases the anticipated benefits are very closely aligned with the resources of the company or individual applying for financing and/or business change. It is important for the lender or hiring decision maker to be sure that they are comparing similar businesses and their associated benefits with the new venture to ensure that the new project will be successful in obtaining the requested funding. One benefit to be considered is whether the anticipated benefits are in line with the new project’s financial commitment and capacity.

The executive summary is another section of the business case that is usually of great importance to the finance function because it provides the complete description of the project and what is being proposed in terms of funding and business structure. The summary is not to be considered in isolation or as a substitute for the detailed and comprehensive report of the financial impact to the organization. The executive summary should be understood before considering the full report of the project description and the associated financial statements.

The benefits section of the business case typically follows the summary. This is typically where the major risks of undertaking the project are described. These include the risks related to capital and working capital, operating expenses, direct and indirect costs, payroll and other benefits such as market access, non-controlling interests and tax benefits. The major risks are essential elements for the evaluation since they may dictate whether or not the project should proceed.

The third section of the business case is called the Benefits Assessments and Project Management section. This portion is designed to identify and compare the benefits provided by the various business options. In general, this section should focus on evaluating the project management process that has been integrated into the overall business case. Since this can be complex and requires additional effort on the part of the applicant, it is critical to ensure that the applicant includes a detailed description of the benefits received from each option.

The fourth and final section of the business case is called the Controls and Compliance Assessment. It is designed to describe controls and methods for ensuring compliance with applicable laws, regulations, and industry standards. Applicants should have a thorough understanding of the types of controls and methods that they will need to implement in order to make the best decisions regarding each aspect of the project. Applicants should be required to answer the following questions in order to meet these requirements:

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