What is a business case?

The Business Case is a document that helps an organisation decide whether to approve the start of a project or not. Typically, we say that the business case justifies the project because it should make clear that the benefits of doing the project outweigh the cost and effort, i.e., the project is the right thing to do. As such it is one of the most important documents in the project lifecycle. A poor or missing business case might indicate that the project is not justified, i.e., it has not been properly verified that it is the right thing for the organisation to do.

What should a business case include?

Imagine you were given the task to make a decision about a significant investment based on the contents of a document. What would YOU want that document to contain? Typical sections that are helpful could be:

  • Background – an explanation of the problem or opportunity the project will resolve. Why is this business case even being considered? What situation or circumstances have brought us to this point?
  • Benefits – what will be the measurable results of doing this project? How/why are those benefits good for the organisation? Can we link to strategy?
  • Budget – you will most likely not have a detailed budget at this point, but you will need to give an indication of costs or a high-level estimate
  • Risks – how risky is the proposed project? Is it a “sure thing” or are the odds higher for failure?
  • Investment appraisal – an analysis of why the investment is a good idea. This can include both financial and non-financial factors but should try to explain in tangible, measurable terms why the project is a good idea
  • Options analysis – obviously this project you are proposing must be your preferred way of solving the problem or opportunity or gaining the benefits. You need to explain how this option came to be your favourite. What other options did you look at? Why is this one best?

Who should create the business case?

In many cases the business case for the project is written by the project manager. This is a somewhat topsy-turvy way of doing things. Think about it… the business case is written to justify the project. Without the business case there should be no project. So how can a project manager write a business case for their own project? The very fact that there is a project manager in place implies the decision to do the project has already been made.

So who should write it?

The Association for Project Management (APM) is pretty clear: it is the Sponsor. The Sponsor is the senior, active Champion of the project who holds overall accountability (effectively, the buck stops with them if it is the wrong project or the project is done wrong) so naturally it should fall to them to formally justify the project.

Typically, they would not do the actual writing themselves but rather task someone with it. That person may very well turn out to be the person who later becomes the project manager. Either way, the business case benefits from input from several people:

  • The Sponsor
  • If a project manager and/or project team has been identified, they will have valuable input
  • Customer/ end user
  • Supplier
  • Other experts (depending on the project, could be lawyers, HR, technical staff etc)

Key tips:

  • Don’t mistake the business case for the project plan. The business case should be put together before the project is started properly and at that point detailed scope definitions, schedule and budgets will not exist. The content of the business case is indicatory.
  • Keep it alive. Following from the previous point; when you start out you will know very little and the contents will be high level only. But as you progress through the project you will learn more and more details will be discovered so the business case can be updated and re-approved.
  • Keep it simple. Don’t go overboard with complicated formatting or fancy formulation. A simple, straightforward word document with plain English (or other relevant language) is best. This is not the time to bamboozle the audience with your creative writing.
  • Do you have concerns about any aspect of the project? Put it in the business case! If you withhold information from the decision makers, it is your fault if things go wrong later and it turns out the wrong decision was made.

What next?

Wellingtone can help you to define your business case and other project management deliverables through our extensive PMO consulting services.

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By: Karin Maule

Karin Maule
Categories: Consulting

Published: 24 November 2022

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