A business case takes the entire concept of a project and breaks it down into its various components. This separation of idea creation from execution lays the foundation for business analysis. By breaking down the project into its various components, it makes it easier to understand the purpose of each and the strengths and weaknesses of each component. This results in the creation of an ultimate business case, which ultimately describes the requirements and strengths of the project and provides rationale for it.
A business case captures the reason for initiating a project. It typically is presented in a well structured written document, however, may also come in the less formal form of a verbal proposal or oral presentation. It lays out a road map to delivering the project and providing the required benefits for both the organisation and the stakeholders. A business case can be very persuasive if it is properly worded and designed.
The benefits derived by the project are usually listed first in the business case. This benefits paragraph should be a list of six to eight bullet points outlining the project’s key benefits. The benefits can be divided into two categories: short term versus long term benefits. Many organisations will identify what are known as critical milestones, which are identified to be the most important benefits the organisation can receive, usually numbering in the tens of thousands.
The executive summary provides an overview of the key stakeholders, their relative relationship to the project and the expected impact to them, and the overall implications of the project on their businesses. This section must be detailed, including an assessment of the risks that may arise due to the project. Each risk is assigned a numerical value to indicate the level of risk, and the likelihood of it occurring. The benefits and the risks are then ranked according to their relative priority. The summary could end with a recommendation, for example recommending that the project be proceeding, or that certain key stakeholders accept additional management assistance to mitigate their risks.
The business case will contain details about the project manager, including his role and responsibilities. The project manager will have a detailed description of the deliverables, agreed date for their completion and scope of the project. He will have been granted a stakeholder authority, who is responsible for contributing to the project deliverables and communicating to all other stakeholders about their status. Other stakeholders will be named, including potential customers, business analysts, risk managers and others. The project manager will also be required to prepare and submit an application for funding, and to prepare and submit an assessment of the risk of delivering the project. He will also need to prepare and submit a project schedule.
The business case enables decision makers within the organisation to understand the cost and delivery time and financial modelling associated with the projects. It enables them to compare these against the opportunities and benefits that might be available to them. It can even help them decide if the organisation needs additional resources to deliver the project successfully, whether the costs are justified and if the benefits from doing so would outweigh the costs. It will also highlight the risks, benefits and time frames associated with each of these. Finally, it can identify what actions the organisation needs to take to address the risks, and what roles and responsibilities it has in addressing them.