Writing the Project's Business Case

Writing the Project's Business Case

1 Why do we need a Business Case?

Let us begin with where the project starts off from. In any business change will be required, even if it is to progress the business against targets that have already been set.

It may be introducing a new sales strategy and action plan. It may be a venture into a new sales channel or establishing a base in a new country.

It could easily be looking at introducing a new product to complementing your existing product range.

All of these will impact on the business and its chosen direction(s), therefore its corporate strategies and targets. No senior manager or director will give you a blank cheque to take any initiative forward, especially when the idea for it may not originate from them.

So we have to capture a lot of information, put it all together and present it to the decision makers for their approval. All in all this information should point them in a certain direction (the way forward) and it will justify the expenditure which proceeding with it will entail. They will assess this information to understand whether the project is worth doing or not.

2 The Business Case

The Business Case is a key and living document within the Project and Programme, used by the Decision Makers, to underpin the decisions they make. Best practice suggests that detail is captured within the following headings:
• business and project objectives
• the reasons to undertake the project
• what:
o options were considered to produce or bring about the change.
o benefits that this change will bring to the organisation, captured in a way that makes the measurement of their realisation easier as a process.
o are the key deliverables
o are the key success factors
o risks which may present themselves, both at the outset and during the life of the project and relevant mitigation and contingency strategies.
• the various costs involved
• the duration of the activities required to bring about the change
• a financial appraisal, frequently called the financial case and can include:
o a cost benefit analysis
o the payback period
o net present value
o discounted cash flow forecast using an internal rate of return
• an evaluation mechanism

In order to develop a business case as a written document, you need to ask some key questions, as well as thinking about the previous questions above, as all of these will explain why you are doing the project.

We now drill down in two of these areas below.

2.1 What benefits that this change will bring to the organisation

What are the benefits in delivering this project?

These should be listed as part of the project business case. You will find that Project managers and team members may find it difficult to capture and specify the real benefits. These can be confused with the reasons why the project is undertaken.

Ask yourself these questions - without clearly understanding the benefits the project will deliver, how:
• Are you going to motivate others to work on the project?
• Will you measure the degree to which the benefits have been delivered (benefits realisation)?
• Are key stakeholders going to react to the fact this project is about to be started? The benefits needs to be detailed in a SMART format (i.e. specific, measurable, achievable, realistic, time bound) wherever possible.

Sometimes it may not be possible to do this and in these cases, we need to look at the impact of this factor to identify relevant metrics.

Benefits can include factors like:
• business reputation
• process improvements
• incorporated customer sacrifice
• communicated corporate social responsibility actions
• a lifelong learning culture
• redefined corporate culture and values
• improved workflows and work plans
• customer satisfaction
• environmental impact and green policies
• safety and environment improvements
• more relevant leadership capabilities
• social benefits
• satisfaction
• robust risk management
• product innovation
• Mergers and acquisitions
• greater corporate climate
• increased market share
• redefined corporate structure
• business unit integration and harmonisation
• reduced absenteeism
• morale

2.2 The Key Deliverables

Key deliverables are the main products that the project will create during it's life.

These will be identified when we go through the project planning process and the project plan, which will include the work breakdown structure and network diagram.

Sometimes these are called milestones and form the basis of milestone planning.

We trust you have found this article useful and if you wish to get more details of what goes into a Business Case, then please write in.