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This idea of proving a project’s worth is called a business case. Even though it uses the word “business,” this idea is important for all types of organizations, including those that aren’t trying to make money. In these settings, it might be called a “case statement” or something similar.
Before a business case is made, a needs assessment is often done. A needs assessment is the process of identifying and analyzing gaps between the current state and desired outcomes to determine whether a project is necessary and what it should achieve. This assessment looks at the organization’s current abilities and environment to find the best ways to reach the desired future goals. Along with the business case, there is also a plan to manage and realize the benefits of the project. The business case is presented before the project life cycle, which you will learn more about in future lessons. According to the image below, it is considered “pre-project work,” which includes activities and analyses conducted before a project formally begins. This work helps to clarify the project’s goals, assess its feasibility, identify potential risks, and justify its value before resources are committed. Feasibility refers to the practicality and potential for the success of a proposed project or undertaking, and a feasibility plan addresses each of these elements.
Once a needs assessment is done, usually, a business case is written. The business case is important because it sets a potential project up for success. It does this in several ways.
First, it clarifies the problem or opportunity. By writing a business case, people are able to better understand the issue (or opportunity) and exactly what the company is trying to solve. This is advantageous because knowing exactly what problem we are addressing allows us to come up with viable solutions to solve it.
A business case also adds value because it allows the company to see what the expected benefits of the project will be and compare those to the expected costs. As you can imagine, if the costs outweigh the benefits, there’s really no reason to move forward with a project!
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Another reason a business case is written is to make sure decisions that cost a company money have been well thought out, which results in reducing the financial risk to the company. In addition, writing a business case can help ensure the overall project will align with the goals of the company.
Overall, think of a business case as “why we should do this project” before time and money are committed to a project.
You might wonder what aspects of a business case are included, with the goal of ultimately justifying why a company should move forward with a project. A business case usually includes the following:
| Business Case Component | Description |
|---|---|
| Executive Summary | This is a brief overview of the document, which addresses each major section of the document. |
| Problem or Opportunity Statement |
This is a concise statement that addresses what issue the project will solve or the opportunity that will be taken advantage of. Note: This statement is based on the needs assessment that was done prior to starting the business case. Example: If a salon relies on manual booking processes, and it wants to create a mobile scheduling app, it might say, “The salon’s manual booking system causes scheduling errors, missed appointments, and extra work for staff. A mobile scheduling app is needed to streamline booking, reduce mistakes, and improve the client experience.” |
| Options | This section lists all of the potential options and directions the company could take to solve the problem listed. |
| Recommended Solution | This is where the company looks at the strengths and weaknesses of all options and justifies why it chooses a particular option. |
| Cost-Benefit Analysis |
What is the project expected to cost and what will the expected benefits be? Example: Costs might include staff training and app development, while benefits might include fewer no-shows, which saves money, increases revenue, and saves staff time. |
| Risk Assessment |
While we get into risk analysis in more detail later in this course, for the purpose of the business case, some of the potential risks as they relate to project success or failure are addressed in this section. Example: For our salon scheduling system, risks might include the clients’ resistance to using technology to schedule appointments. |
| Timelines | The business case will address the expected timelines and milestones of the project. |
| Stakeholders |
This section of the business case will identify stakeholders; these are the people who have an interest in or are impacted by a project. Example: The stakeholders for the salon might include clients, employees, and management. |
| Implementation Plan | This is a brief overview that addresses the steps needed to put the plan into action. |
Creating a business case is usually done before the project starts and, ultimately, leads to approvals to move forward with the project.
Since there are limited funds, companies must select projects carefully, and, ultimately, this is why we create a business case—to see what types of projects make the most sense to solve the problems we have or take advantage of opportunities in the market. Think of the business case as the starting point for a project, which outlines the project details at a high level.
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