Preparing an Effective Business Case

When deciding on whether to deliver a project or pursue a course of action, there should be a clear business case for doing so. Sometimes the business case is so obvious that a formal document is not prepared, but, in many situations, there is advantage in formally setting out the costs and benefits of an intervention. This is particularly important where the business needs to invest capital, time, and resources into a project.

So, what needs to be included in a business case and why is it important?

A business case document needs to persuade a decision-maker of the continued benefit and value of investing resources into a project or action. Its audience may be the Board of Directors, investors, or external funders, so it is important to get it right.

A formal document will typically be drawn up at the very start of a project and, for a complex project, will be updated throughout to ensure the business case remains valid.

The document should summarise the rationale for the project. It should be structured, in a clear and concise manner, covering the reasons why the project or intervention is needed, as well as defining the aims and objectives. Typically, the rationale will make the strategic case for the project, demonstrating how it is consistent with the wider plans and objectives of the organisation.

The business case will include a cost-risk-benefit analysis and demonstrate, on balance, that the project remains desirable. By making an effective economic case, the document should outline that the proposed solution has balanced the costs, benefits, and risks; considered alternative options, and concluded that the project will deliver value for money.

The project must be viable and demonstrate how the proposed resources, including any suppliers, will be able to adequately meet the project’s needs. There must be a sound financial case, demonstrating affordability, using realistic costings and funding sources.

From a management perspective, the project also needs to be achievable and appropriate consideration needs to be made of the organisation’s internal structures and capacity to deliver. This should include reference to the equipment, technical skills, systems, and processes that will be employed in the project and their robustness in the context of the project’s risks.

An effective and credible business case will satisfy all the above. It will instil confidence in decision-makers and help deliver a stronger project.