Business Case

projects business caseBusiness Case is one of the primary documents that allow summarizing the need for launching a project and analysing possible alternatives. Throughout the lifecycle of the project this document is used to show the project justification and reasonability. In the Initiation Phase, Business Case is used as a way for making decisions on initiating the project, setting primary goals and defining the cost-benefit ratio.

Business Case: Definition

Business Case is a formally written document that proves the justification for proceeding with a given project. It is a part of the project’s mandate investigating the business problem, examining expected tangible and intangible benefits, setting expected costs of the project, and describing potential impacts of the project on the performing organization. The project business case document includes a brief description of how the project will be organized and performed. The main idea of the document is to address the business problem at the highest level and define the need for starting the project.

A business case example is owned by the project initiator, or sponsor. It can be created by analysts and experts employed by the sponsor. Often creation of the document requires using a GAP analysis as well as estimation of expected risks and threats.

The practice of project management does not establish a single and strict format of the business case document. Still, the development process tends to answer several common questions, including:

  • What is the business problem?
  • What is the budget available?
  • What are the timelines?
  • What the benefits can be gained?
  • What are the deadlines for achieving the benefits?
  • What the key people will be involved in the project and what are their responsibilities and roles?

Business Case: Importance

The business case is one of the key documents that help organize resources in business terms and facilitate making discussions between the sponsor and managers of the performing organization concerning the business justification of the project.

Business case sample templates should be reviewed by the management team and the sponsor before a decision on the project initiation has been made. Also the document can be revised if needed during the course of the project to ensure that:

  • It is still valid so the business problem is being solved.
  • The project is running a desired so it is justified.

The project management team will use the business case as a vision-giving document depicting the primary goal of the project and outlining the motives to undertake the project. The importance of the document consists in gaining the next benefits:

  • Remind the team about the priorities of the project and business values to be followed.
  • Maintain the morale of team members.
  • Minimize the possibility of scope creep.

Because business case templates are critical to the right understanding of the project justification, the document should be available to all stakeholders. Usually copies of the document are distributed among the project stakeholders.

Business Case: the Checklist

The document allows business owners and investors to improve the investing process and ensure that the business need will be addressed upon successful completion of the project. Here’s a general checklist showing key steps for developing a business case template:

  • Make a definition and analysis of the business need, threat, opportunity, or problem.
  • Create a general solution for the business problem expressed in terms that decision-makers are able to understand.
  • Make a list of alternative solutions to be discussed and considered with decision-makers.
  • Use lifecycle cost estimates to define budget requirements.
  • Conduct Cost-Benefit Analysis.
  • Conduct Return on Investment (ROI) Analysis.
  • Conduct Investment Risk Analysis.
  • Analyze key assumptions made.
  • Use results of the analyses to set project time frames and delivery schedules.

Eric McConnell

Eric is a project manager who has worked on various projects in the software industry for over ten years. He took a variety of roles and responsibilities for planning, executing, performing and controlling software projects and project activities. Today Eric helps software development companies in reviewing and improving their software definition, development and implementation processes. Eric is one of the most honorable contributors of MyManagemetGuide website.

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