From organizing the number of administrative employees and procurement requirements to breaking down project stages to present timelines and project updates to senior management, project management is a feat in itself.
But, before all of this can even begin, a business case needs to be created. So, what is a business case, why is it a crucial tool for project managers and how do you write one? This blog addresses all of this and more.
A business case is usually a document that justifies a project's expenditure. In other words, it defines the core business objective of the project to support the required costs to complete the project. The business case contains all the necessary information needed for stakeholders to authorize a project, program or portfolio. It essentially answers the following project startup questions:
To create a business case there are a number of key data inputs which are outlined below. Without this data, the business case will have 'holes' and may be harder to write and even justify to relevant stakeholders why the project should go ahead.
Without thorough planning, the success of a project will be limited and resources and budgets wasted - having a detrimental effect to the business. Business cases justify a project, outlines what success looks like and identifies any potential risk.
When a project has an established business case, expectations are managed. As the business outlines the project's goals and what it is set to achieve, stakeholders are aware of expectations during the project's conception phase. And, those expectations are then communicated down the line, from project manager to contractor to even administrative support. Everyone understands the core goal and anticipated outcome.
Writing a business case can be broken down into four steps: identification, solution, recommendation and implementation.
Identify the business problem that the project is going to solve. What is the problem, describe it in detail, where does the problem stem from and how long will it take to fix it?
Describe the solution to the problem you have identified AND whether there are any alternative solutions, i.e., is the project suggested the best possible solution to the problem outlined in step one?
An easy way to handle this step is to note the alternative solutions, quantify each benefit, forecast each solution's cost, explain the feasibility of each, discern the risks and document all of this in the business case.
From the analysis of the alternate solutions in step two, recommend the preferred solution to the problem outlined in step one. Rank the solutions, from best to worst, based on scoring criteria. This criteria could focus on costs vs. benefits or company values, for example.
Now that the problem has been identified in step one, and the preferred solution has been supported in steps two and three, describe how to reach that project solution. Step four is all about explaining how the business can achieve the preferred solution.
A business has just tendered and won a large contract which would require it to increase its overheads and employee headcount to meet the project’s administrative demands.
|Step 1: Identification||The problem identified is the significant increase in employment costs and infrastructure investment required to support the project. Ideally, the business would like this to be solved prior to commencement.|
|Step 2: Solution||
Through project research, external resourcing options provided a feasible and simple solution to the increased overheads and employment costs problem.
Outsourcing vs Offshoring vs External Recruitment Agency comparison was established considering costs and benefits and alignment with company values and objectives.
|Step 3: Recommendation||
Through this comparison analysis, offshoring to the Philippines was deemed to be the winning solution as it would reduce employment costs by 70% and the offshore provider chosen, would handle all infrastructure, IT and facility setup for new employees.
As the support required was fully administrative, it didn’t require additional employees to be on the ground for the project. As offshoring is remote work, this function suited the project’s nature.
|Step 4: Implementation||With the support of the offshore provider, an offshore team setup plan was established.|
A business case document is broken down into separate sections to give the relevant project review board members or stakeholders an organized overview of the information they need to make a decision: is the project a go-ahead or a pass?
An example breakdown of a business case can include these sections:
The first step to developing a business case or plan is always the most challenging part. Whether you've started creating one already or are considering a new project, check out our business planning template to give you some guidance and pointers on getting started.
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