A good business case is often the key to getting the buy in you need for projects. It’s a document, first created during the project initiation phase, which lays out all the details of a project, from its benefits and risks, to the technical solutions needed. It should justify any expenditure, time investment, or risk taking which is necessary for the project.
Business cases can provide the clarity and nitty-gritty organisational details which aren’t always included in a more general project proposal. Often, it will be reviewed by project stakeholders before being put into action. Because of this, it’s vital to know what to include and the best practice for producing a business case.
This can avoid hold ups while the Business Case needs to be reviewed and will make the document more valuable as a record of expectations, goals, and potential pitfalls as the project moves forwards.
How formal should a business case be?
A business case should be clear and concise. The level of formality in the language used depends on the industry and what is expected by your intended audience.
The purpose of the document is to provide the relevant information needed for decision making, so try to make sure there are as few barriers to understanding as possible. Avoid the use of jargon and long, unwieldy sentences. Only include relevant information and ensure consistent style and readability.
Project sponsors are typically responsible for the creation of a business case. It’s a good idea to have one person looking over the document to ensure these principles are consistently used. However, ideally many different team members can contribute where specialist knowledge would be helpful.
What should be included in a Business Case?
Most business cases are made up of four sections, each serving a different purpose. Below, we will discuss what each of these are and the type of information required for every section.
1. An Executive Summary
This is not always necessary for shorter business cases, but for longer ones it’s a wise idea to begin with a high-level summary of the document.
This should be written last and provide an overview of the most important elements of the case to prime readers with the big picture.
2. Finance
This section is needed to answer the questions – “how much will the project cost and where will the money go?.” It’s going to be of particular interest to stakeholders who will be providing funding for the project.
Included within your finance section should be a comprehensive financial appraisal. You may need to consult with financial experts within your business or industry to make sure this is as accurate as possible. The main purposes of the appraisal are to identify the costs, weigh these against the benefits of the project, and assess the value for money it provides. It should also include a prediction of the projected cash flow.
Most business cases also include a Sensitivity Analysis in this section. This is where the financial implications of various scenarios the project may present are explored. It may, for example, look at how the potential value of the project may change if a necessary element takes more time or resource than planned, or if the market changes. This is done to thoroughly consider the risk of the project.
3. A Definition of the Project
This is usually the longest section of the project and deals with most of the why, what, and how questions about the endeavour.
You should start this section with a brief introduction, going over why the project was implemented. For example, if it’s to solve an existing problem or take advantage of a new opportunity. You can relate to any other related studies or programs you need to in order to explain this.
Next, you should flesh out the goal of the project, what you will need to meet it, and how this will compliment your business strategy as a whole.
You should then note down a list of benefits the project might have for the business. You can start this list with specifically financial considerations, but make sure to also include some non-financial benefits. Some examples of this could be if the project will improve customer service over its course of action, or if the results are likely to raise morale among employees. If there are limitations to any of these benefits, try to include these too in order to help others accurately assess the good qualities of the project.
Options, scope, and impact
This is where you cover several possible solutions to the problem at hand and explain the pros and cons of each. If you need to use technical language, make sure this is explained or included in a glossary at the end of the document.
As well as detailed descriptions of 3-5 of your solutions, you should also explore the option of doing nothing, and explain the possible consequences of this.
You should additionally define the boundaries of the project – what will or will not be affected by it. This section should also include any other business plans that are inter-related with the project, and what impact the failure or success of one may have on the other.
Outline Plan
This section goes over the schedule for each of the main activities of the project, creating an overall timescale. In most cases, this is split into a number of project stages, with a key decision marking the start of each one.
Included with each activity, you should write who will be accountable for it, how it’s done, and what is required to complete it and move on to the next stage.
Market and Risk Assessments
Begin by assessing the marketplace in which your business is operating. It can often be helpful to start with a PESTLE analysis, and then conducting further research on areas of interest. This section should display a deep understanding of your sector and how your project is going to succeed within it.
You can then move onto a risk assessment. This is a key part of the document which examines each possible risk. You should explore the possible consequences of each risk coming to pass and explain the plan in place to minimise the risks as much as possible.
Project Approach and Purchasing Strategy
This is where you describe how the necessary tasks are going to be completed. This might include any tasks which will be outsourced or expertise you will need to bring in-house to succeed.
For the purchasing strategy, you should describe what purchasing process will be used during the project whenever a budget spend is necessary. This is also where you can include different financing options, and how you will make the decision whether to buy or lease equipment.
Project Organisation
The last main section of the case should describe how the project will be delivered and the process for making decisions.
In many cases, there will already be a project governance framework implemented in your business. If not, you should create your own document explaining the roles and responsibilities of those involved in the project, how different decisions will be made, and when project progress will be reviewed.
You should also indicate how everyone involved will keep track of the project’s progression. This may be done through regular reporting, a project board which will be updated at set times, or another solution.
Require Some more Help?
Elliot Training run a highly informative, interactive course to help those new to case studies. Our workshops include information about how a business case is structured and developed through a project Lifecyle, as well as nurturing practical skills on problem solving and taking appropriate action.
Find out more about our Business Case Course here