How to make a business case

What is a business case?

A business case is a document that outlines how a project, program, or initiative will benefit a company. Business cases can be applied to various scenarios, such as introducing a new product, increasing expenditures, hiring additional staff, or any situation requiring a significant financial investment by a business. They serve to highlight the value of the investment, helping key stakeholders decide whether to proceed with the initiative. An effective business case includes the following elements:

• Strategic context: Clearly explains why this change or initiative is necessary.
• Economic analysis: Provides a return on investment (ROI) assessment for the business opportunity.
• Commercial approach: Established based on the sourcing and procurement strategy.
• Financial case: Demonstrates the affordability of the opportunity within the project’s timeframe.
• Management approach: Showcases the roles, governance, and project lifecycle.

When managing a project, business cases play a crucial role in the initiation phase. They provide stakeholders with the opportunity to assess the project’s feasibility and potential impact. Without them, it can be challenging to convince stakeholders to invest in a new initiative.

Business cases aren’t required for every project. They should be developed when initiatives or investments demand significant business resources and approval. If unsure, consider which stakeholders are essential for project approval. Additionally, ask yourself the following questions:

• How will this opportunity benefit the company?
• What is this project’s purpose?
• Why are we working on this project?
• How long will this project take?
• What resources will this project require?
• Who is working on this project?
• How will we evaluate the success of the project?

Steps for creating a business case

Define purpose and identify stakeholders

Articulate the project’s purpose and its alignment with the company’s goals and objectives. Ensure that appropriate team members and stakeholders are included in corresponding sections of the business case. Collaborate with relevant team members to build your proposal, such as having the finance team review your budget and ROI analysis.

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Gather data and evidence

Collect pertinent data, statistics, and market research to support your case. This may include market trends, customer feedback, or financial projections.

Outline benefits

Clearly state the benefits that the project will bring to the company. These benefits could include increased revenue, cost savings, improved efficiency, or enhanced customer satisfaction.

Evaluate risks

Identify potential risks associated with the project and develop a plan to mitigate them within your business case.

Estimate costs and provide ROI analysis

Detail the project’s costs, encompassing initial investment, operational expenses, and budgeting for potential risks or contingencies. Highlight how the investment’s benefits will outweigh its costs.

Establish a timeline and define success metrics

Create a timeline featuring key milestones and deliverables. Once the timeline is in place, define metrics and key performance indicators (KPIs) that will assess the project’s success.

A well-defined business case, addressing potential risks and presenting a clear path to success, is a persuasive document. It can influence stakeholders to support a project, or if ineffective, it can halt a project in its tracks. By meticulously crafting business cases, you can ensure the smooth progress of your projects.

For more insights into project management and strategies to enhance work productivity, learn more organizational tips.