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Content of a Business Case:
- Reasons for the project.
- Costs
- Benefits - Tangible
- Benefits - Intangible
- Timescales
- Investment Appraisal
- Assumptions and any other supporting text
A Business Case defines WHY the project is being undertaken.
It is arguably the most important document for any project. If you don't know why you're doing a project you shouldn't be doing it in the first place !
Would any idiot start a project without knowing why
?
Unfortunately the answer is yes - it happens frequently in business.
The precise content and format of a Business Case can vary between different organisations and projects.
Local standards, financial and otherwise, may apply. A government sector organisation may have very different objectives from a commercial company.
Reasons
The Reasons for the project should be stated first - some words saying why this is being done. If this is unclear it indicates that further thinking and questioning is needed before going further.
Costs
These should be derived from a project plan initially - based on the resources and timescales. It should be possible to come up with quantified estimates from this. Ongoing running costs, over a given timescale after project closure, might also be included.
It is helpful to break costs down by area - depending on the project.
For example costs of design, people, buildings, information systems, training etc.
Benefits
Some Benefits may be tangible - measurable (or at least an estimate) in money terms. Others may be intangible - more about making the world a better place.
Both are equally valid - the key point is that the organisation understands why they are going ahead with the project. Is it "hard" savings or revenue in money terms ? Is it something less tangible such as improving customer satisfaction or improving staff morale ? Often it is a mixture of both.
One case where the benefits may be straightforward is in projects concerned with conformance - to legislation or regulation. Here the organisation may have no choice. The benefit is not being prosecuted, fined or otherwise penalised.
Timescales
This will be an important factor in any management decisions about the project.
When will we be spending the money - which financial year, which quarter or budget period ?
When will benefits accrue ? Sometimes there is an "instant win" at the end of the project. Sometimes benefits come much later, maybe years later.
Investment Appraisal
Management may need some indication of return on investment, in percentage terms. All projects involve risk and so if a project delivers a low rate of return some will argue that the money would be better left safely in the bank.
This is also a way of comparing "competing" projects. The organisation may have a number of potential projects, but wish to concentrate resources on those that deliver most.
Assumptions
It may be necessary to partly base a business case on certain assumptions - for example "The government will enact this piece of legislation".
If so these should be stated. If they are not borne out the viability of the business case and the project can be reviewed later.
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