Project Business Case Development
A Business Case is defined as “a decision support and planning tool that projects the likely financial results and other business consequences of an action.”
It is the trigger to initiate a project to identify a business problem or an opportunity.
The Business Case should:
- Provide a description of the problem or opportunity.
- List possible alternative solutions.
- Analysis of the business benefits, costs, risks and issues; (Benefits can be stated in financial and non-financial terms. Benefits must in all cases be measurable)
Strategic risks should be identified that may prevent the project from being implemented, usually a Monte Carlo Analysis is done to determine the high-level project drivers.
All of this provides stakeholders with all the information they need to make an informed decision on project selection and project initiation, making the business case an invaluable part of the organizations strategic benefit process.
Need and Reason
The development of a business case provides the financial justification for an investment decision.
To do this effectively it is critical that the process, scope and biases of the business case developers be clearly understood.
The preparation of an effective business case requires a disciplined approach to a complex process and needs to be effectively lead, managed and supported. ProjectLink provides the processes and guidance to coordinate the efforts of the required team members in delivering the information needed as input into the business case, and then provides the tools and skills to develop the business case.
How the Project Business Case is Delivered
A skilled ProjectLink consultant would develop, guide and implement the following process either in a consulting role or as the project manager:
Establish and Agree the Concept Business Case Compilation and Review Process.
- Project Manager must arrange for an alignment session with the responsible team as part of the setup for success during the start of the business case compilation and development.
Develop the Business Case Development Plan.
- The Business Case Development Plan is developed under the leadership of the Project Manager, but assisted by assigned specialist during the start of the study.
- The purpose of the Business Case Development Plan is to:
- Determine the desired outcome of the Business Case.
- Identify all the necessary participants for the development of the Business Case.
- Description of the roles and responsibilities.
- Identify the requirements that the Business Case and Evaluation Model must fulfil.
- Have a time line for the development of the Evaluation Model to access the projects worth.
- Agreed on a review process, deliverables and milestones.
Inputs to the Business Case should cover.
- Assumptions and Methods
- Business Impacts
- Sensitivity, Risks, and Contingencies
- Conclusions and Recommendations
The business case has a direct impact on the organizations strategic objectives. It identifies projects that need to be executed and highlights the importance of each project in a quantifiable method to determine which projects will deliver the greatest benefit, in the end this results in projects, programs, and portfolio’s that are linked to the organizations strategic objectives and deliver only on important benefits that have been identified.
The Business Case should unlock the potential value of the initiative and provide an initial indication of the project’s worth in order to justify further work and expenditure in a Concept Phase.