What is a Business Case?
A business case is a written, formal argument for investment of a resource (usually money, but can also be time, people and other resources) into some kind of action, typically a new investment, product or business. The purpose of a business case is to explain the action, objectives and benefits, the resources required and to demonstrate a return on investment (ROI).
Why is a business case important?
Capital (and other resource) is scarce, so to successfully compete for it, you will need to construct a sensible, measurable and accurate document that decision makers can use to decide whether your project merits the allocation of resources.
A business case forces its author to commit the thinking to paper. This process alone means you must think through your idea thoroughly in order to properly refine. Above all, a business case must be credible. In a corporation, the business analyst often lead authors a business case, along with a team of contributors.
A business case enables better decision-making, planning, budgeting, project management and accountability.
Once you have a formal business case, it can be shared with a variety of stakeholders including investors, financiers, potential board members, staff and others.
Critical Success Factors (in arguing your case):
- Do your homework – understand your industry, trends and back up what you say with research.
- Develop a strong market strategy – explain why it’s a good idea, define your consumer and show how you’ll grow your business in a saturated, competitive market.
- Create solid financials that are conservative and believable. You will need to prepare sensible forecasts at a minimum and a cost-benefit analysis is mandatory.
- Pay attention to your presentation – your report needs to look professional. in other words, is must be professionally formatted, with no typos or grammatical errors.
Business Case Inclusions:
This will vary depending on the organisation and the complexity of the business case. At a minimum, a business case normally includes:
- Executive Summary
- Team members.
- Problem definition.
- Project overview (including objectives and scope).
- Benefits (financial, non-financial, tangible and non-tangible).
- Strategic alignment.
- Costs, including cost benefit analysis and ROI. (If you are seeking finance, you may be required to do a cashflow and other financial analysis.