What’s a business case?

A business case captures the reasoning for initiating a project or task. It is often presented in a well-structured written document, but may also sometimes come in the form of a short verbal argument or presentation. The logic of the business case is that, whenever resources such as money or effort are consumed, they should be in support of a specific business need. An example could be that a software upgrade might improve system performance, but the “business case” is that better performance would improve customer satisfaction, require less task processing time, or reduce system maintenance costs. A compelling business case adequately captures both the quantifiable and unquantifiable characteristics of a proposed project.

Business cases can range from comprehensive and highly structured, as required by formal project management methodologies, to informal and brief. Information included in a formal business case could be the background of the project, the expected business benefits, the options considered (with reasons for rejecting or carrying forward each option), the expected costs of the project, a gap analysis and the expected risks. Consideration should also be given to the option of doing nothing including the costs and risks of inactivity. From this information, the justification for the project is derived. Note that it is not the job of the project manager to build the business case, this task is usually the responsibility of stakeholders and sponsors.

There is a fallacy that a business case is a thick tedious manuscript, written by professional consultants in an incomprehensible language. It’s printed on high-quality paper stock and placed onto the top shelf of an executive’s office to be used as a breeding ground for dust bunnies.

This is not a business case; this is a disaster.

The sole role of a business case is that of a communication tool, composed in a language that the target audience understands and with enough detail to facilitate decision making on his or her part. There’s no magic formula when it comes to the size of a business case. The size is irrelevant. What is relevant is that the business case provides all the necessary information to make the job of the decision maker possible. Brevity is always a virtue.

As a matter of fact, a business case does not have to be a written document at all. It could be in the form of a verbal message, but the structure and the content is, nevertheless, the same as if it were written up.

Think about it, you present and hear business cases all the time, with your children, parents, significant others, friends, and colleagues. Did your teenage daughter convince you that she can’t possibly survive without an iPod? (“I can listen to class notes and presentations and will improve my marks.”) How on Earth did you agree to go on that Mediterranean cruise with your in-laws? (“It will make me happy, dear. Besides, Dad naps all the time anyway.”)

This is it, no mystery, just a communication tool.

The vast majority of unsuccessful projects fail not because of poor project management, but because of poor decisions with respect to the choice of projects. A good business case helps to make right decisions and avoid horrible waste.

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