Business Case Analysis

Business Case Analysis

Posted on

A business case capture is a method of organization and management of data to support business decision-making. It can be described as a sequence of related events leading from planning to execution that describes a working model for a specific business problem. The key decision points are documented and compared with others for best result. This process gives the chance to change an option if it fails to deliver the targeted results.

A business case captures the rationale for initiating a planned activity or project. It often comes in the form of an oral presentation or written document, but can also be in the form of an oral agreement or written record. It usually consists of three or more supporting documents and is therefore quite comprehensive in its approach to decision-making. In business cases, they are used to describe and justify strategic business decisions, such as those involved with building, leasing, land usage and development, inventory control, financial transactions, purchasing and inventory management.

A business case is most effective when it integrates information from five elements: planning, strategy, internal requirements, investment and results. It enables the identification of the appropriate investment and a corresponding business case methodology. It also helps in the prioritization of the alternatives. When properly applied, it generates an investment appraisal which in turn provides a clear picture of the costs and benefits associated with the alternatives. Moreover, it is a powerful tool for decision-making, particularly in large companies that have many stakeholders.

The basic function of business cases is to provide comprehensive information that allows decision-makers to make sound investment decisions. However, it must be understood that business case analysis alone will not solve all business problems. They are useful only as a guide for decision-makers. The other two main functions of business case are to provide information needed by decision-makers to generate appropriate strategic investment decisions and to identify the risks associated with such decisions. Both of these functions help ensure that all stakeholders are informed about important issues. Thus, they provide key decision-makers with a clearer picture of the subject.

In addition, a business case provides information necessary to evaluate an investment proposal to assess its suitability for funding and use in a particular context. It is therefore crucial that any financial case be evaluated on its own terms and therefore, one must be sure that relevant information is provided. Moreover, financial cases are more complex than other appraisal models because they require detailed information from both the analyst and the decision-maker. This requires more attention and expertise than is generally available in other forms of business case studies.

Finally, a business case process is effective only if the project managers or stakeholders fully understand it. An effective application of the business case methodology requires communication between the decision-maker and the subject of the study. This communication can only occur when the subject knows what the decision-maker is thinking; it cannot happen if the subject is unaware of what the decision-maker is asking him/her to do or suggest. For this reason, business case studies must include information about why the subject is considering the project and what the impact will be if the project is pursued, as well as what impact the project would have if it is discontinued.

Leave a Reply

Your email address will not be published. Required fields are marked *