A business case is a written document that explains the strategic goals and objectives of any proposed project. It typically presents the rationale for starting a project or activity in great detail. It can be presented as a formal written document or can be written in an informal, conversational manner. The final product is a “case study” that describes in simple, concise terms the reasons why the project was started in the first place.
Most business cases are not written documents in the traditional sense, which means they do not have to be presented in the prescribed format (or even form) with subplots, numbered points and supporting documentation. In fact, many business cases are simply a series of ideas that are presented in an organized, logical way. One reason this is important is because, unlike a research document or written proposal, a business case does not need to be updated or revised after it is completed. Also, unlike research documents or proposals, it needn’t be peer reviewed.
A business case is one of the key ways in which project sponsors can identify the benefits from a proposed project. As such, it is necessary for any business case to be robustly based on appropriate research. It needs to be able to deal with the wide range of possible eventualities that may affect the project, including the possibility of unexpected externalities such as budget constraints, timing restrictions, geographical constraints, legal issues and internal company politics. It also needs to be able to deal with contingencies such as delays, budget leaks and oversights. A business case should be prepared in a way that is easily read, understood and modified as necessary.
So how do you deal with these potential issues? Firstly, if you are presenting a business case, a good rule of thumb is to assume that all possibilities have been considered. This may sound obvious but many executives remain ignorant of potential contingencies and their possible impacts upon the organisation. For example, there could be some very broad benefits that are not immediately evident, especially if your organisation is relatively small and still growing. Therefore, take care to ensure that any assumptions you make are conservative and realistic in order to accommodate potential changes to the status quo, unforeseen external events and the changing economic and social landscape. Remember that the purpose of any document is to present the organisation’s key benefits, which are the only reasons that investors will fund your venture.
Secondly, you must take care to ensure that your description of the risks involved in implementing the programme is accurate and should focus on the most important aspects of the project. You might also wish to detail exactly what would occur if funding was not approved in line with the detailed business case assumptions. The details are extremely important because they will allow a more thorough assessment of the likely impact on the organisation.
Thirdly, it is necessary to provide a cost benefit analysis of the project, together with risk management and timescales. It is usual for executives to think in terms of costs first, rather than benefits. However, they should remember that although costs are important, they must not be the only consideration. There must also be a balance between the costs associated with implementation and any projected benefits. A well drafted business case provides all these details and allows you to build a strong case for why funding will be required in the first place, the risks associated with failure and what proportion of the costs and benefits should be allocated towards the costs.