Business Case

Posted on November 15th, 2021

For a project, the business case defines what is to be done, why, and the timescales/costs involved.No project should be undertaken without first establishing a business case for it, as there is no justification for it otherwise.

The progress of the project measured is against the business case to ensure timescales/costs are not being exceeded and business benefits are not being eroded (i.e., it is still worth doing).

Choosing the Right Type

Frankly, business cases are boring and confusing, easy to write poorly, and may be unconvincing. As such, business cases are a balancing act of length: long enough to provide sufficient detail, while short enough to maintain interest.

A Summary Business Plan is around 10-15 pages, best used for new ventures and early stages of development.

A Full Business Plan is still applicable for new ventures, but with interim stages of development, including a blueprint of the business; these are around 25-35 pages long.

Lastly, an Operational Business Plan, at 40-100 pages, contains a blueprint for operations, including details of operational and financial measures.

Speaking Proper

Be specific and explicit when describing the business benefits. Avoid vague phrases like 'helps a lot', 'very important', 'too much', and 'too many'. Instead, use values, estimates, and ranges, e.g., "We will increase customer patronage by 25%".

Be realistic. Don't make false promises about the product, instead demonstrating the benefits and challenges.

Be conservative in objectives, costs, timescales, and deliverables; overproducing by a small amount is great for client and makes the business look good. By contrast, being too conservative impresses to the customer that estimations about your own work aren't accurate.

Use visuals; investors like illustrations, e.g. graphs, charts, business models, and tables. Find them online (with references) or create your own.

Considerations

Aim: What decision(s) actually need to be made?

Audience: Who is making these decisions? Their interests as a business should be considered, as well as their style, i.e., grand vision or facts 'n' figures.

Arrangement and Appearance: How is it going to look? Alongside a good structure, the appearance is just as important. Information should be easy to find, the writing should be engaging, and diagrams should look pretty.

Structure

For all types of business cases , there will be roughly 7 aspects to the business case.

Introduction and Background

This details the purpose of the document, i.e., the business case for the project, and the background of the proposed project respectively.

Management Summary

Also known as an Executive Summary, it describes the problem/opportunity the project intends to address and states the options considered for the project. All should state why they have (not) been recommended, and the recommended option should further detail the expected business benefits.

This makes the management summary the most important part of the business case, as most 'executive readers', i.e. potential customers, are cash-rich but time-poor.

Description of the Problem

Elaborating further, this adds adds detail to the business problem & opportunity. It includes the available options to solve the problem, with the considerations and justifications for viable and rejected options. The option of doing nothing should also be discussed.

Cost/Benefit Analysis

This quantifies the costs of carrying out the project and the expected benefits. The costs can either be tangible, like it will cost x amount or an expected increase of 20% to the user base; or intangible, like long-term benefits or competitor elimination by offering new products.

Note: intangible benefits will be questioned by the project tenders, as their benefit is subjective by nature.

Impacts

These are essentially the 'side-effects' of the project solution. For example, developing a solution to automate a process within a business affects the employees currently responsible for the manual process. This makes them hard to quantify, as they predominantly affect the customer's business.

Risks

The principle risks must also be outlined, with a recommended option and proposed measures to either avoid or mitigate them.

Conclusions and Recommendations

Lastly, a summary of the business case and the required decisions from the customer are found in the conclusions and recommendations, based on the Management Summary.