The Business Case helps you to capture the reasoning for starting a project, idea or initiative. It helps you to decide whether an initiative is worthwhile investing in. In a business case you describe the background, resources, benefits and costs, and risks of an initiative.
A business case is written to identify a future opportunity that is supported by an analysis of the benefits, risks and costs involved. The business case consists of five main parts: the reasons & goals, the needs, the options, the costs & benefits, and the risks. In addition, you should write a summary highlighting the main findings of the business case.
Step 1: Reasons & goals
Explain about the background of the project or initiative. Clearly describe which problem or opportunity is addressed with the initiative. Especially explain why the outcome of the project or initiative is needed.
- Why this initiative and why now?
- Are there any problems that make this initiative needed?
- Is there an opportunity that is addressed by this initiative?
- What will be achieved with the initiative?
- What are the expected results of the initiative?
Step 2: Needs
Describe what is needed to make the initiative a success for your business. Describe for instance which resources, partners, delivery structure and monitoring is needed.
- Who are the stakeholders of this initiative?
- What are the stakeholders’ level of interest and attitude towards this initiative?
- What are the requirements for implementing this initiative successfully?
- What is needed from the business and what is needed from the employees?
Step 3: Options
A short description of the different options considered for the project or initiative. There are different options to implement the initiative. Some possible options are: to implement the initiative not at all, to completely implement the initiative, to implement a part of the initiative, to implement the initiative in phases or to implement a minimum of changes.
- What are the options for implementing the initiative?
- What would the impact of each option be on the business?
- What is the planning of the preferred option?
Step 4: Benefits & costs
The estimated costs should include one-time costs and on-going costs. The estimated benefits should include financial benefits as well as other non-financial benefits. The costs and financial benefits should be expressed in a Return on Investment (ROI) calculation, demonstrating whether the project is profitable or not. In a ROI calculation, a cost/benefit analysis is made. To get a clear idea of the impact of the initiative, create one ROI calculation for the current situation (without the initiative being implemented) and one for the future situation (when the initiative is implemented).
A ROI can be made with the Return on Investment Calculator tool. Copy the results to the business case for a good overview of the benefits and costs.
Step 5: Risks
Summarize the key risks of the project or initiative. Include risks that might affect time, cost, cash flow, quality, and levels of benefit achieved. Determine for each risk what the impact might be and the probability of the risk occurring. Give a score from 1 (low) to 5 (high) to the impact and probability of each risk. Multiply the score of impact with the score of probability to determine the effect of the risk. The risk with the highest score on effect will have the biggest implication for the initiative.