Table of Contents
4.1.3 Summary of Changes Required
4.1.8 Assumptions and Constraints.
5 Summary, Conclusion and Recommendations
The Business Case Document
The Purpose of the Business Case
The business case is the document that links project proposals to strategic business goals. The business case describes significant, high-risk project proposals by weighing the investment against its potential business value. Business analysts complete the business case after developing strategic goals and themes and before selecting and funding projects. The business case captures information needed to effectively propose investment in a new project.
The business case justifies the application of resources to a proposed initiative. Significant resources are needed for large, complex, strategic projects. The business case serves as a financial anchor to ensure companies do not commit significant investments on the basis of inadequate decision-support information.
What Is a Business Case?
A well-formed business case is:
A business-oriented tool that supports sound project investment decisions- A proposal to invest in a change initiative
- A formally structured argument for taking a course of action
- A trigger to secure project funding
The Benefits of Using a Business Case
A well-formed business case provides organizations with the following benefits:
- It verifies the strategic alignment of project objectives
- It ensures a common understanding about the project among stakeholders
- It supports risk management practices
- It imposes a disciplined approach to the decision-making process that requires the consideration of all relevant factors
Who Prepares the Business Case?
Authors of the business case can vary widely across organizations. However, basic roles should include the following:
- Lead author: senior business analyst or manager
- Supporting authors: subject matter experts enlisted by the lead author to participate in the business analysis activities (e.g., project manager, IT manager, business visionary, financial analyst, researchers)
- Key stakeholders: those who are likely to be impacted by the initiative
Steps to Prepare the Business Case
The basic steps needed to complete the business case may vary somewhat, but a general list is given below. If a feasibility study was conducted, the process starts at step 6; a standard feasibility study report captures the information gathered from steps 1 through 5.
Characterize the business problem or new opportunity
Conduct a quick current state and competitive assessment
Identify solution options
Review recommended option(s) with the executive sponsor
Determine the proposed project’s boundaries and scope
Conduct cost/benefit analysis
Conduct initial risk assessment
Create the business case
How to Use This Template
This document provides a guide to completing a business case. Add, remove, or redefine sections to meet unique business requirements. Example tables, diagrams, and charts are included to provide further guidance on how to complete each section.
Executive Summary
Summarize information and findings from each sections by briefly describing the:
- Problem or opportunity
- Solution alternatives
- Recommended solution
- Implementation approach
The Business Case
Describe the business case document, why and how it was developed, and for whom it was prepared.
Current Business Situation
Describe the current state of the business, including problems and opportunities, and their origin and nature. Provide information about the importance of the initiative to the organization, and elements that would characterize a successful outcome.
Environmental Analysis
Describe the business drivers and the core aspects of the business environment that have triggered the need for this project. These may include:
- Business vision, strategy, strategic themes
- Insufficient business processes or technologies
- New competitor products or processes
- New technology trends (or opportunities resulting from new technologies)
- Commercial or operational trends driving changes in the business
- Changes to regulatory, legislative, or other legal requirements Provide any facts or evidence to support these conclusions.
Opportunity Analysis
Describe the business problem or new business opportunity. If the project is meant to solve a business problem, describe the following:
- Document the problem in as much detail as possible
- Determine the adverse impacts the problem is causing within the organization, and quantify the impacts as much as possible (e.g., lost revenue, inefficiencies)
- Determine the immediacy of the resolution and the cost of doing nothing
- Conduct a root-cause analysis to determine the underlying source of the issues
- Determine the potential areas of study required to address the issues
- Draft a requirements statement describing the business need for a solution
If the project is being proposed to take advantage of a new business opportunity, describe the following:
- Define the opportunity in as much detail as possible, including the events that led up to the discovery of the opportunity and the business benefits the opportunity could potentially offer
- Quantify the expected benefits as much as possible (e.g., increased revenue, reduced costs)
- Determine the immediacy of the opportunity and the cost of doing nothing
- Identify the cost of pursuing this opportunity versus the costs of other opportunities
- Determine the potential areas of study required to understand the viability of the opportunity, and determine the methodology or approach needed to complete the study
- Draft a requirements statement describing any business needs related to the opportunity
Alternative Assessment
This section provides a qualitative and quantitative evaluation, analysis, and comparison of all feasible solution options. Options suggested may include doing nothing, doing something that will achieve a similar result, or doing something that will achieve a better result than current performance. If a feasibility study was conducted, it will have already provided this information for each option. Provide the following information for each solution option:
Option 1 – [Option Name]
Description
Provide a detailed description of the solution option.
Feasibility Analysis
Describe the feasibility of the solution option by indicating the resource requirements, costs, assumptions, constraints, risks, business outcomes, and business benefits for three phases: building or acquiring the solution option, implementing the solution option, and operating the solution option. Be sure to include information about the solution operations in both the business and technical environments.
Summary of Changes Required
To summarize the overall feasibility of this solution option, break the solution down into components and rate the feasibility of each component in the following table:
Benefits
Describe the tangible and intangible benefits to the company upon implementation of the solution. One obvious benefit is that the solution will address the business problem or opportunity outlined above. The benefits given below are examples only. Actual performance figures must support all quantifiable benefits after the solution is operational.
Costs
Describe the estimated tangible and intangible costs to the company if the solution option is implemented. Include the costs of the actual project (e.g., procured equipment), as well as any negative impact to the business resulting from the delivery of the project (e.g., operational downtime).
You may need to identify whether the cost item is a capital or operational expenditure. Attach a separate spreadsheet showing an analysis of the cost equations as an appendix to this document if further information is needed for approval.
Risks
Summarize the most apparent risks associated with this solution option. Risks may be strategic, cultural, environmental, financial, operational, technical, industrial, competitive, or customer-related.
To complete this section thoroughly, it may be necessary to undertake a formal risk assessment by documenting a risk management plan. Define clear mitigation techniques or plans to reduce the likelihood and impact of each risk.
Issues
Summarize the highest priority issues associated with the adoption of this solution option. Issues are events that adversely affect the ability of the solution option to produce the required deliverables.
Assumptions and Constraints
List the major assumptions and constraints associated with the adoption of this solution option.
Summary, Conclusion, and Recommendations
Summarize the entire business case at a high level, revisit findings and conclusions, and close with recommendations.
Option Rankings
Identify the criteria by which each of the solution options was assessed. Then assign a rating for each criterion to determine a total score for each option.
Legend:
1. Customer Satisfaction: impact of project on external customers
2. Business Results: impact of project on strategic goals
3. Employee Satisfaction: impact of project on employee retention
4. Revenue: impact of project on increased revenue
5. Cost: low versus high cost to fund the project
6. Longevity: length of time the enterprise will benefit from the new product or service
7. Size of Investment: large versus small investment risk
8. Project Complexity Risk: simple versus complex project
9. New Technology Risk: proven technology versus cutting edge/unproven
10. Benefit Risk: risk to realizing projected benefits
Option Recommended
Based primarily on the highest total score achieved above, choose the recommended option for approval. Summarize the primary reasons why this option was chosen over other options.
Implementation Approach
Provide an overview of the general approach undertaken to deliver the preferred solution option and derive the business benefits.
Attachments
Supporting Documentation
Attach any documentation relevant to the business case. For example:
- Problem/opportunity research materials
- Feasibility study research materials
- External quotes or tenders
- Detailed cost/benefit spreadsheets
- Other relevant information or correspondence