How To Measure The Benefits Of Business Case Analysis

How To Measure The Benefits Of Business Case Analysis

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A business case captures the rationale behind starting a project or activity. It may be presented in an organized written document, often with examples and illustrations, or may be a simple verbal agreement. In short, a business case can be described as a summary of why a certain project is needed, how it will be conducted and managed, and what results it should yield. Like a legal brief, a business case aims to explain how the process will unfold and support the decision-maker by suggesting reasonable methods of approach. When properly organized and documented, a business case can become the road map for determining what steps will be taken to achieve the business objective.

A properly organized business case shows the decision-maker all the expected benefits and costs along with the time lines and other deadlines. It also presents the status of the project and what are its various costs over time. The benefits presented should be relative to the budget set aside for the project. They must also be in proportion to the expected benefits so that the benefits are not over-stated or unduly discounted.

Every business case should present the risks to the project, but it is not enough to show the risks. Risk management is not about being overly prepared for all possible events that can disrupt production and damage the objectives. A business case should also include a section on the timescales involved for the project. It should describe the potential problems that will potentially occur during the planned period and give ways to deal with them if they do occur. The risks can come in the forms of delays, cost overruns, overages, failure of delivery, equipment failures, and others. The timescales involved should be stated in exact numbers so that the planned maintenance costs can be determined with ease.

An effective business case should have five main key elements. First, it should identify the key elements of the business case. The key elements include the product, its competitors, market structure, demand, and technology. Second, it should describe the measurement of these key elements. These measurements should be quantitative or qualitative.

Thirdly, it should describe the methods of measuring the key elements. This could either be cost or sales-based methodologies. Fourthly, it should describe the benefit-cost tradeoffs involved in the process. Fifthly, it should describe the investment appraisal approach used. These last two steps allow companies to compare alternative investment strategies using the investment appraisal model.

There are different ways of working through a business case. One way is to use project management approaches to manage the timescales and the key elements of the case. Other approaches are to use project finance and analysis to determine the cost and benefits of the project. When it comes to measuring the benefits, companies can choose between financial and technical methods of measurement.

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