A business case captures the rationalizing rationale behind starting a project or activity. In many cases it is presented as a well-formulated written document, however, can also come from a short oral presentation or verbal agreement. This short document is a business case that is critical to help decision-makers (aka managers) identify an opportunity, evaluate its potential value, and determine how to manage it.
Why a good business case must be formalized? The primary purpose is to assure that the decision-maker (a manager) identifies the benefits from the project, and the risks that may result if he or she doesn’t pursue it. In order to do this, the decision-maker must identify all of the project’s potential benefit types, and those that may result from risks. By doing so, the manager will be able to specify what types of activities or costs are necessary to meet those goals and risks. Likewise, he or she will be able to define the scope or target activities or costs that will be addressed in this project. In doing so, a good business case becomes a tool that can help managers or executive decision-makers assess the risks or rewards associated with a given project.
A business case becomes a tool when it is reviewed, analyzed, revised, analyzed again, and refined so it provides a complete picture of the project, including all of its identified benefits or risks. In addition, it should also provide a good way to compare and contrast the project’s costs against the benefits. All of these are necessary aspects of a sound decision-making process that will help prioritize, plan, and ultimately control resources.
Why is a business case so important? As a planner or analyst, you need to keep track of the project’s progress and costs over time so that you can make the best use of the limited financial means you have to invest in the project. This allows you to make the best use of limited resources and to ensure that you achieve the benefits and the bottom line sooner. In other words, it helps you keep track of your investments, returns on your investment, risks, and timescales.
When your decision-maker asks for your input regarding a current project, you may want to prepare a business case or executive summary that outlines the status of the project and what steps you are considering to achieve its goals and objectives. This summary should focus on the project definition, risks, expected outcomes, cost estimates, and timing for implementation. In addition, the summary should also provide a summary of the top management team’s thoughts, objectives, and expectations for the project. The summary should provide a clear picture of why the business case or executive summary was written, including what the purpose is and what the desired results are.
If you do not already have a business case or executive summary prepared, there are many templates available online for you to choose from. Depending on the type of business case you are preparing, you may only need one or two templates, which are easy to download and use. Templates range from those that outline the most basic project description, risk management, and timescales to those that provide a comprehensive assessment of project success, scope, and goals. Regardless of your choice, finding a template that fits your needs will help you build an effective and efficient finance function so that you reach your company’s goals and objectives sooner.