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Project management is naturally complicated, but it can be disastrous if you don’t have sufficient buy-in from the right parties. Writing a strong and complete business case can make all the difference. Martin Webster’s guest post gives exceptional information on how to create a business case that will make your project a success! Preparing for Business Change This article is about writing a business case. In, asked the question: “Why do too many projects fail to deliver their objectives even though project management best practices appear to be used?” To recap, his research identified the following common causes of project failure:. Poor.
A weak business case. Ineffective top management involvement and support Poor project planning can bring down your business, so download our on-demand webinar called ' to make sure your planning is successful. This article examines the second cause ― a weak business case ― and shows you how to write a business case for your project or business change initiative.
We also provide an outline for the business case template. The business case is developed during the early stages of a project; skipping or racing through the stages described in 'How to Write a Business Case: 4 Steps to a Perfect Business Case Template' is a recipe for failure. Since this how-to guide covers a lot of ground and is a long read you may want to check out the table of contents below for some quick jumping around. Table of Contents. Introduction to Writing a Business Case Before we consider how to write a business case we must deal with the following 3 questions:.
What is a business case?. Why you need a business case?. When do you use a business case? The Business Case One of the first things you need to know when starting a new project are the benefits of the proposed business change and those benefits to the business. If you don’t know these things there is little point proceeding.
'Understanding is the beginning of approving.' – The business case is developed during the early stages of a project and outlines the why, what, how, and who necessary to decide if it is worthwhile continuing a project.
Whilst the project proposal focuses on why you want a project it will only contain an outline of the project: business vision, business need, expected benefits, strategic fit, products produced, broad estimates of time and cost, and impact on the organisation. In contrast, the business case, which is first developed during an initial investigation, has much more detail and should be reviewed by the project sponsor and before being accepted, rejected, cancelled, deferred, or revised. Depending on the scale of the business change the business case may need further development as part of a detailed investigation. Therefore, it should be developed incrementally so that time and resources aren’t unnecessarily wasted on the impractical.
Why You Need a Business Case Preparing the business case involves an assessment of:. business problem or opportunity,. benefits,. risk,. costs including investment appraisal,.
likely technical solutions,. timescale,. impact on operations, and.
organisational capability to deliver the project outcomes. These project issues are an important part of the business case. They express the problems with the current situation and demonstrate the benefits of the new business vision. The business case brings together the benefits, disadvantages, costs, and risks of the current situation and future vision so that executive management can decide if the project should go ahead. Many projects start life as a, which is fine in itself, but never see the light of day or stumble along aimlessly for too long because the clarity of scope, time-scale, cost, and benefits are not defined adequately during the first stages of the project. Is the Project Worth Doing? Why are you starting a project?
Chances are you’re doing it because you need to. Usually, the problem is something that gets in the way of achieving your goals. So it seems a project is about achieving goals and your goals won’t be realized unless you deal with the problem (or opportunity or circumstance.) If a project is worth doing you need to answer 4 simple questions:. What is your goal?.
What’s stopping you from reaching the goal?. How much change is needed to overcome the problem?. Are you certain this will solve the problem?
Can you answer these questions quickly? Do you have evidence to support or refute your assumptions?
If not, it may not be worth starting a project. When to Use a Business Case The business case is needed when resource or expenditure on a project has to be justified. Approval is usually sought from the project sponsor and other interested parties. For instance, the finance function may authorise funds and the IT department provide resources. How to Write a Business Case The purpose of the business case is communication. Therefore, each section should be written in the parlance of the intended audience. Moreover, it should only contain enough information to help decision making.
When writing a business case keep the following in mind:. the document should be brief and convey only the bare essentials,. make it interesting, clear and concise,. eliminate conjecture and minimise jargon,. describe your vision of the future,.
demonstrate the value and benefits the project brings to the business, and. keep the number of authors to a minimum to ensure consistent style and readability.
The project sponsor is responsible for preparing the business case. However, all appropriate team members should contribute to its development. Likewise, from other functions ― finance, HR, IT, service delivery, and so on ― can provide specialist information. What’s more, those writing the business case should have a thorough understanding of the project’s aims and be able to merge the varied and potentially complex plans into one document using the following business case template. 'Clear definition of goals is the key to success.' – Edison Montgomery The Business Case Template What follows are the four steps to preparing a perfect business case template for your project.
It includes the following four sections:. Executive Summary. Finance. Project Definition. Project Organisation Section Section Heading Question Answered EXECUTIVE SUMMARY 1 FINANCE 1.1 Financial Appraisal How much? 1.2 Sensitivity Analysis How much?
2 PROJECT DEFINITION 2.1 Background Information Why? 2.2 Business Objective Why?
2.3 Benefits and Limitations Why? 2.4 Option Identification and Selection What?
2.5 Scope, Impact, and Interdependencies What? 2.6 Outline Plan What? 2.7 Market Assessment Context?
2.8 Risk Assessment Context? 2.9 Project Approach How? 2.10 Purchasing Strategy How? 3 PROJECT ORGANISATION 3.1 Project Governance How? 3.2 Progress Reporting How? The Business Case Template Adapted from Buttrick, ',' p.287.
The Executive Summary Depending on the length of the business case you may want to include a high-level summary of the project. The executive summary is the first section of the business case and the last written. It is a short summary of the entire business case. It succinctly conveys vital information about the project and communicates the entire story to the reader. First impressions are important. Get this right! The Finance Section 'Make no mistake, my friend, it takes more than money to make men rich.'
Gouthey The finance section of an effective business case is primarily for those who approve funding. The finance function will be interested in this plus the first half of the project definition. Financial Appraisal When you prepare the financial appraisal seek advice on content and presentation from the finance function. In the case of capital developments, consult subject matter experts.
The purpose of a financial appraisal is to:. identify the financial implications for the project,. allow comparison of project costs against the forecast benefits,. ensure the project is affordable; ensure every cost associated with the project is considered,. assess value for money, and. predict cash flow.
Sensitivity Analysis Sensitivity analysis concerns and looks at alternative futures by measuring the impact on project outcomes or assumptions of changing values in which there is uncertainty. In effect, sensitivity analysis lets the project accountant experiment with possible scenarios. The Project Definition This is the largest part of the business case and is for the project sponsor, stakeholders, and project team. It answers most of the why, what, and how questions about your project. Background Information The purpose of this section is to give a clear introduction to the business case and project. It should contain a brief overview of the reasons why the project or business change has come about: the problem, opportunity, or change of circumstances. If necessary, refer to related programmes, projects, studies, or business plans.
Business Objective This part describes why are you doing the project. The business objective answers the following questions:. What is your goal?. What is needed to overcome the problem?. How will the project support the business strategy?
Benefits and Limitations The benefits and limitations section describes the financial and non-financial benefits in turn. The purpose is to explain why you need a project. For instance, to:.
improve quality,. save costs through efficiencies,. reduce working capital ― the difference between current assets and current liabilities,.
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generate revenue,. remain competitive,. improve customer service, or. to align to corporate strategy. The business case should also include any limitations since these present potential risk to the project. Option Identification and Selection Identify the and describe them in enough detail for the reader to understand. For instance, if the business case and proposed solution makes use of technology, make sure to explain how the technology is used and define the terms used in a glossary.
Since most problems have multiple solutions an option appraisal is often needed. This will explore the potential solutions and recommend the best option. When writing an initial business case the option appraisal is likely to contain a long list of options and will cover many possibilities.
As the project continues a number of options will be rejected. The final business case may contain three to five options ― the short list ― that includes a do nothing or benchmark option. Scope, Impact, and Interdependencies This section of the business case describes the work needed to deliver the business objective and identifies those business functions affected by the project. Moreover, the scope, impact, and interdependencies section should state the project’s scope and boundaries. It describes what is included and what is excluded plus the key interdependencies with other projects. It is important for the business case to consider the failure of other interrelated projects and show how such dependencies make impact benefits. Outline Plan The provides a summary of the main activities and overall timescale ― ― for the project.
Ideally, the project should be with key decisions preceding each stage. Use this section to answer the following questions:.
What is required?. How is it done?. Who does what?. When will things happen? This outline plan lists the major deliverables and includes a brief project description plus accountabilities for each activity.
Market Assessment It is important that the business case provides its readers with a thorough assessment of the business context ― the market assessment. In other words, make the underlying business interests explicit. Therefore, the market assessment should show a complete understanding of the marketplace in which your business operates. A good starting point is the inclusions of a PESTLE ― political, economical, sociological, technological, legal, and environmental ― analysis.
Risk Assessment The risk assessment summarises the significant and how they are managed. The risks included should cover those that could arise from you project or the organisation’s ability to deliver change. This section answers the following questions:.
What risks are involved?. What are the consequences of a risk happening?. What opportunities may emerge?.
What plans are in place to deal with the risks? Every project should include a. When writing a business case make sure this is included as it explains how risk and opportunity are managed. Project Approach The project approach describes how the project is tackled. That is, the way in which work is done to deliver the project. For instance, a project with much of the work contracted out is likely to take a different approach to a project that develops an in-house solution.
Purchasing Strategy This section describes how a project is to be financed and whether a decision to buy, lease, or outsource should be taken by the organisation before purchasing. Moreover, the purchasing strategy should describe the purchasing process used. A formal procurement process may save time and money and reduce project risk. The Project Organisation The last section of the business case template is of most interest to the project manager, project team, and managers responsible for delivering work to the project. This project organisation section describes how the project is set up.
Project Governance This section of the business case shows the reader how the project is structured and the different levels of decision-making. Usually a business will already have implemented a project governance framework that will support the project through each stage.
If your organisation does not use a structured use this section to include:. roles and responsibilities in the project (the project team and stakeholders),. the project tolerances,.
any standards that the project should take into account,. review points, and. how decisions are made. Progress Reporting Finally, the business case should define how project progress is recorded and the project board updated on. Usually the project manager does this by preparing a at regular intervals. Managing the Business Case The completed business case provides structure for the project and project organisation throughout the. Therefore it should be used routinely for reference and not consigned to the shelf.
Accordingly, the project sponsor and project board should review and update the business case at key stages to check that the project remains viable and the reasons for doing it are still valid. Ideally, the review should take place before starting a new stage to avoid unnecessary investment in time and money. Summary In this article we showed you how to write a business case. We covered a lot of ground and may give the impression that the resulting business case is a large and unwieldy document. This is not the case. A business case should be concise and to the point.
For small projects it may run to a few pages. For larger projects and the document will be large. Therefore, be sure to keep the intended audience in mind when preparing each section and include supporting information in an appendix. For instance, the option appraisal section may summarise each option with the details contained elsewhere for reference. To conclude, the purpose of a business case is to outline the business rationale for undertaking a project and to provide a means to continually assess and evaluate project progress.