The Business Case

A Business Case explains why a project is needed, and the changes and benefits that it is designed to deliver. stakeholdermap.com
The Business Case shows the link between the project outputs and programme or corporate strategy outcomes.

Outputs are the deliverables from projects and outcomes are the effects of the changes that the deliverables are designed to produce.
examining the Business Case


The project Business Case will link into a programme or corporate level Business Case/Plan. The corporate level Business Case will set out the wider strategic outcomes that will come from the programme's projects. Once the Business Case is approved more detailed planning is undertaken and documented in the Project Brief and Project Initiation Document (PID).

What is in a Business Case?

business case


The Business Cases contains the: reasons for the project, the options, expected benefits, risks, cost and timescale and investment appraisal.

  • The reasons for the project in context of corporate and programme strategy.
  • The options that have been considered and the reasons for the chosen option.
  • The benefits that will be achieved by the project outcomes.
  • It should set out the benefits in measurable terms so that an assessment of the projects success can be made once the project is complete.
  • A summary of the risks that could affect the delivery of the project outcome.
  • An outline of the project costs and milestones from the programme and project plans.
  • An Investment Appraisal - an analysis of the cost of the project against the expected benefits over time.

When do I use a Business Case?

The Business Case is developed by Senior Management and presented for approval by the Project Board or Project Sponsor.

It aligns with the overall Business Strategy and it is often the first document used in the Project Lifecycle. In a Programme Management environment it may draw from a Vision Statement (Get a Vision Statement Template) and in Prince2 it is preceded by a Project Mandate.

Once approved, the Business Case allows the project to move forward into an Initiation or Planning phase.

The Business Case will guide the development of the Project Brief and the Project Initiation Document, which define the project scope, key timelines and resource requirements.

During the project

The Business Case is the check that the project is on track to deliver business benefits. It needs to be referred to frequently during the project for example:
  • To check progress at Stage Gate or Quality Review points. Is the project still on track to meet the Business Case?
  • To review each change request: Will this change assist us in meeting the Business Case?
  • To assess the impact and urgency of issues and risks: How will this risk impact the Business Case?
  • To approve mitigating actions against risks and issues: Will this action contribute to the Business case or is it needed to ensure we still meet the Business Case?

At Project Close

At the end of the project the project outcomes are assessed against the Business Case.

Some outcomes won't be realized immediately so they are assessed to ensure they are capable of delivering the benefits outlined in the Business Case.

Why is the Business Case so important?

The Business Case is crucial to ensuring project success, because it ensures that the project is aligned to corporate strategy and that it will deliver real business benefits. Without the Business Case an organisation is likely to face:

  • White elephant projects
    These projects result in an outcome/deliverable that can't be sold/disposed of and costs more in maintenance than it delivers in value. Examples of white elephant projects.

  • Pet projects
    A project that is close to the heart of a particular manager, but is not delivering any tangible benefit to the business.

  • Knee Jerk 'something must be done' projects
    Common in government, these are projects that get started in the heat of the moment because there is a perception that something must be done or the organization 'must be seen to do something'. For example media created controversies can result in projects to fix a perceived problem that may be blown out of all proportion.

  • Projects that are simply unnecessary
    Similar to Pet Projects and 'something must be done projects', for example, a project created by a drive for continuous improvement. These projects have no impact on business performance or strategy. Sometimes projects are just busy work - they make us feel and look busy, but they are not adding value. Doing nothing is an option that is not considered enough.

  • Scope creep
    Without a clear business case additional requirements will be added to the project scope. They will be great for someone, and may result in shiny new play things, but won't contribute to the bottom line.

  • Increasing costs and delays
    Hand in hand with scope creep will come increasing costs and delays as the project direction and scope changes without any guiding principles.

  • Never ending projects
    If you don't know what the reason and expected benefits are for a project you won't know when the project is finished. There are situations were something new is required, for example software may be obsolete and need replacing, but without a Business Case how do you know which software will bring the most benefits? How do you avoid being dazzled by the enterprise option that you don't really need?

  • Cancellation
    If the benefits of a project can't be articulated then it is difficult to answer 'why are we doing this?'. Budget cuts or falling revenue may lead to your project being scrutinised in a drive to cut costs. If you have an approved Business Case it is much easier to justify the project.

  • Loss of resource
    The Business Case is the justification for resources – machine and people. If you don't have a compelling Business Case you face a greater risk of resources being pulled onto other projects.

  • Wasted effort
    Cancelled projects, white elephant projects, and plain unecessary projects all mean wasted effort - part constructed facilities, mothballed machinery, unused or underused software, nobody needs that.

Business Case - references and further reading

arch daily. (2016). White Elephants: Over-Budget, Unsuccessful, and Embarrassing Architecture Projects From Around the World [online] Accessible at: https://www.archdaily.com/795913/white-elephants-over-budget-unsuccessful-and-embarrassing-architecture-projects-from-around-the-world [Accessed 21 November 2016].

Read more on Project Documentation

 
 

 
 
Microsoft Project Templates


Support stakeholdermap.com
If you liked this page, feel free to recommend us!