What is the business case?
The business case captures the reasoning for initiating a project or task. It is the information needed for authorisation of the project.
What is the purpose of the business case?
The purpose of the business case is to document the justification for the undertaking of a project usually based on the estimated cost of development and implementation against the risks and the anticipated business benefits and savings to be gained. The total business change must be considered, which may be much wider than just the project development costs. The concept of the business case may exist under other names, e.g. project brief, project charter, high level project plan. Irrespective of the name the purpose is to present justification for project start up and initiation.
Why use business case analysis?
Business case development is a step that companies often use for project selection. It analyses how fulfilling the business case for the project will implement the corporate strategy and sustain the competitive advantage of the company.
The business case can further be developed with the addition of more details. You can convert the business case to action steps and major milestones in order to develop a plan that will guide your venture through the entire project life cycle, including that of the project outcome.
The business case is a key input to the project management plan and is usually owned and created by the project sponsor. Following project close or completion a post-project evaluation (PPE) will usually be held- usually some months after project completion – to measure the project’s benefits against those set out in the business case.
Business Case Composition
Most organisations will have a standard approach to a composing a business case. However, key elements usually include:
- options (a brief description of the different options considered and option recommended)
- benefits expected (expressed in measurable terms against today’s situation
- risks (summary of the key risks of the project)
- cost (extracted from the project plan)
- timescales (summary of the project plan)
- investment appraisal
Ownership of the business case
The business case is the key document for a project manager – it is both the justification for their activities and a benchmark by which the project benefits will be measured. The business case is also the key document of the project portfolio management process and, as such, is the document used by the organisations project investment committee. However, the primary owner of the business case is the project sponsor. The sponsor is responsible for ensuring the continued viability of the project and that the benefits defined in the business case are realised after project completion.