The case for the business case

So you have a whole list of project ideas that you would like to implement. You have already gone through the process of sifting through them and giving them scores to help with your selection of your top candidates. Now what? Should you just go ahead and implement?

You might have guessed the answer is no. When you collected your list of ideas and went through a detailed process of analyzing and rating them you looked at each at a high level. All your costs and pay off figures were likely very high level estimates. That was ok at that time because you were reviewing probably a long list of candidate ideas and wanted to create a short list to focus on.

Now that we have this shorter list and we are closer to making some ideas turn into reality we need to examine each idea a little more closely. We need to make sure there are good reasons for us putting the time and money and effort into an idea. This will help us filter out ideas that, although they were initially thought to be promising, on closer scrutiny turn out not to be so.

It is also true that there may be a number of ways to implement the idea and therefore we will need to have a look at our options and the pros and cons of each.

Enter the business case.

The business case is essentially a document that spells out why we should implement an idea and why we should implement it one way or another. The business case is intended for an audience who will sponsor the project. After reviewing the business case they are expected to know enough to make an informed decision on whether a project should in fact proceed or not. The decision comes at that point. The business case only proposes it by detailing why it is of benefit to the company and how much that benefit is estimated to be.

So how do you put together a business case? Here are a few suggestions.

Executive Summary. This will give a background and some context. Basically it is a paragraph that will answer the question “Why am I writing this business case for this idea?”

Business Drivers. In this section you will list and explain the elements of the business that are calling for a proposed idea to be implemented. It is answering the question “what problems do we have that are compelling us to look at this idea?”

Scope. In this section you will be note the specifics of what you’re trying to solve and how wide a net you will cast to solve it. A proposed project would have to have a proposed scope otherwise it could inflate without control. So say that you are proposing introducing mobile phones for staff in your organization. However you will specify that only field staff, excluding office staff, are your target recipients of those mobile phones because that is what will give you the biggest bang for the buck.

Costs, benefits and payoffs. This is an important section. This section would have to consider all possible costs of hardware, software, space rental, training, staff involvement time, external vendor contracts, cost benefit analysis, return on investment and accepted or company criteria for financial evaluation of the project.

This section must also take into account other than just the obvious costs of implementation. What about the time it would take implementing this idea and the activities that would have to wait and suffer in the meantime. What about other things like inconvenience, stress or other issues?

Payoffs must include all the benefits, short term and long term, to the organization. These should be presented in financial terms as much as possible. Some may be qualitative such as “better customer experience” which may be hard to translate into financial terms without a lot of assumptions and analysis.

This section really lays out the details for the decision makers to help them understand the financial implications of the project or program of projects. Clarity and accuracy are very important as well as making sure all relevant elements are taken into account. A lot of time and effort may be spent on this section.

Options. There are very likely several ways to do something so you will list them and give the pros and cons. There may very well be quite a bit of financial analysis in this area too. Be careful not to go overboard with your options. For example it may be important to compare whether you should host an enterprise application onsite versus subscribing to a service hosted by an external vendor. On the other hand, listing all the possible software solutions under the sun for a problem is time consuming and unnecessary. Restrict your analysis to a few that either have better acceptance in the market or those that are well documented.

Risks. List all the blockers and hurdles that you might encounter with each option and what you might be able to do about them. Note the likelihood of them occurring. Don’t agonize too much with detailed probabilities unless it is absolutely critical that you do that. So don’t write things such as the 73.24 % probability X will happen or 34.7% probability Y will happen. First, it is difficult and time consuming and therefore expensive to ensure these figures are accurate. Second, many people will likely view them with some suspicion because they will be wondering how you came up with the numbers. “High”, “Medium”, “Low” ratings will do just fine. Make sure you are not just assessing the likelihood but also the impact of a risk. It is the combination of impact and probability that tells you how important a risk is. Again in most cases just use High, Medium, Low ratings for impact. Also note the likelihood of success and achieving what you set out to do.

Recommendation. After listing all the facts and expectations present a recommendation for one of the options. This will help the decision maker and save a lot of time. Since you have put together the business case and gone over the details thoroughly you are in a good position to make a recommendation and to clearly explain why you think that is the best option to consider. Keep in mind that you may be challenged on this recommendation so make your reasons and grounds for that recommendation clear and convincing. Also be careful not to insert any of your own biases or any element of a hidden agenda in the recommendation. This might be obvious to the readers and they are likely to call you on it. Make sure you are very transparent about why you are making a certain recommendation.

Business cases need to be walked through with the stakeholders. You will need to discuss them with people who will potentially be impacted by the proposed project. You will be asked many questions and challenged on many points. Some you will be able to answer based on the information that you have already gathered. Other times you will ask to be given some more time to investigate and come back with answers.

The business case may go through several iterations until it is finalized. This is a good thing. Once the final draft is accepted and signed off by the relevant parties you know that there is enough buy-in and support for the potential project.

Thanks for reading.


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