Tathress G.

Masalunga
BSAIS-2C

Developing a Business Case

Objectives:

• To identify what is Business Case,

• To know the purpose of a business case and;

• To understand the benefits of writing a business case.

What is Business Case?

• It is a formal, written argument intended to convince a decision making to approve a

project or a program.

• Captures the reasoning for initiating a project or task. It is often presented in a well-
structured written document, but may also come in the form of a short verbal agreement
or presentation.

A business case is used to:

 Define the need,

 Determine the desired outcomes,
 Assess constraints, assumptions, and risks, and
 Recommend a solution.

Purpose of Business Case

 A justification for a course of action based on the benefits to be realized by using the
proposed solution, as compared at the cost, effort and other considerations to acquire and
live with that solution.
  Used to access requirements against identified business goals and objectives to determine
importance.

 It summarized the need, the business challenges, and the business outcome desired by a
program. The business case determines what will be included and delivered in the
transformation.

 Will it be a new product?

 Will it be a new service?

 Will there be a cultural change?

 Will there be a combination of these in a transformation program?

 What will be the new business capabilities for the organization?

 It enables as investment decision to be made by the executive.

 Understanding what is being are investing in,

 Why the investment is being made,
 What investment is needed,
 What the risks of the investment are, and
 What the return of investment could be.

The business case includes:

• the program background,

• an overview of the organization,

• the organizational structure, and

• Who will be involved?

Elements of Business Case

1. Need Assessment

The need is the driver for the business case. It is the relevant business goal and objective that
must be met. The need assessment identifies the problem or the potential opportunity.

2. Desired Outcomes

The desired outcomes describe the state which should result if the need is fulfilled. They
should include measurable outcomes that can be utilized to determine the success of the business
case or solution.

3. Assess Alternatives

The business case identifies and assesses various alternative solutions. Alternatives may also
include different ways of acquiring these and different timing options.

Each alternative should be assessed in terms of:

 Scope: Defines the alternative being proposed. Scope can be defined using organizational
boundaries, system boundaries, business processes, product lines or geographic regions.

 Feasibility: The organizational and technical feasibility should be assessed for each
alternative. It includes organizational knowledge, skills and capacity as well as technical
maturity and experience in the proposed technologies.

 Assumptions, Risks, and Constraints:

Assumptions are agreed-to facts that may have influence on the initiative. Constraints are
limitations that may restrict the possible alternatives. Risks are potential problems that may have
a negative impact on the solution.

 Financial Analysis and Value Assessment:

The financial analysis and value assessment includes an estimate of the cost to implement and
operate the alternative, as well as a quantified financial benefit from implementing the
alternative.
4. Recommended Solution

The recommended solution describes the most desirable way to solve the problem or leverage
the opportunity. The solution is described in sufficient detail for decision makers and to
understand the solution and determine if the recommendation will be implemented.

Usage Considerations

1. Strengths

 Provides an amalgamation of the complex facts, issues, and analysis required to make
decisions regarding change.

 Provides a detailed financial analysis of cost and benefits.

 Provides guidance for ongoing decision making throughout the initiative.

2. Limitations

 May be subject to the biases of authors.

 Frequently not updated once funding for the initiative is secured.

 Contains assumptions regarding costs and benefits that may prove invalid upon further
investigation

Benefits of writing a business case:

 To provide insight into the viability of your solution or idea:

At a minimum, writing the executive summary and mission statement (we talk
about those elements in the later section defining and presenting the Opportunity) can
give you incredible insight into the viability of a solution or idea you’re considering.
Creating these items also helps you organize and collect your thoughts and validate what
may just be a gut feeling that this solution is correct. Writing the business case out also
provides a foundation for further analysis and solution development.
 To support a feasibility study:
A feasibility study is an analysis effort to determine whether the opportunity can
be reasonably achieved. Presenting a strong business case can garner you support for
conducting this study.

 To prioritize projects:
Sometimes you need to conduct one or more projects to achieve the final solution
and the business case help you prioritize them. For these types of complex projects-
within-projects, the business case can explain for project team members the overriding
strategic goal and mission of the project so that the subprojects have context. Having this
type of documentation is extremely valuable even if it isn’t required for project approval.

ASSEMBLE BUSINESS CASE

Assemble Business Case is the process of synthesizing well-researched and analyzed
information to support the selection of the best portfolio components, programs, or projects to
address business goals and objectives. The key benefit of this process is that it helps
organizations scrutinize programs and projects in a consistent manner, enabling the decision
makers to determine whether a program and/or project is worth the required investment. The
inputs, tools and techniques, and outputs of the process are depicted in Figure 4-19. Figure 4-20
depicts the data flow diagram for the process.
Summary:

The main purpose of the Business Case is to facilitate the investment decision about the
project. It summaries the cost, benefits, and risks and enables the organization to take decisions
about funding a project or not. It enables the business or organization to take an informed
decision based on realistic facts. The Benefits of business case will define the return from
completion of the project. Business Case is a reference document that provides a reference at a
point in time.

Reference:

A Guide to Strategic Analysis for Enabling Business Transformation (Purpose of business case
pp.49-52)

A Guide to Business Analysis Body of Knowledge (Business case pp.234-240)

Business Analysis for Dummies (Making A Business Case pp.248-250)

A PMI Guide to Business Analysis (Assemble Business Case pp.96-97)