A business case document is a formal, written argument intended to convince a decision-maker to approve some kind of action. A well-crafted business case explores all feasible approaches to a given problem and enables business owners to select the option that best serves the organization. This guide explains the format and content of a business case document and the processes involved in its creation.
Before you start writing your business case
Creating a business case document is actually the last of several stages that must be completed before you present it. Throughout these stages, it may become apparent that the project is not currently feasible. Because business case development can be time-consuming, it's important to make that evaluation as early in the process as possible. Essentially, you have to determine the business case for developing your business case.
The first stage of preparation involves a thorough analysis of the situation that led to the initiative for the project.
Once the problem is thoroughly understood and articulated, it's essential to determine the requirements for creating the business case and a rough estimate of the requirements for the project. These requirements might include time and human resources required and deadlines for return on investment (ROI) or for completion of the business case, project or project phases.
Next, you should identify all the sources of data that will be required to support the business case. These sources may include financial sources from within the company, case studies from similar projects, historical data, industry analysis and forecasts, demographic studies and so on.
After you've collected that information, you should take the preliminary plans for the business case to one or more people who will have input into the decision. Ask them for their ideas related to the project, their opinions about the project's worth and feasibility, and -- assuming their opinions are positive -- their support.
Based on all the inputs available, you should have an idea of how likely it is that the project will be approved. Use that determination to decide whether or not to go ahead and write the document.
The executive summary
The executive summary is a high-level view of the business case document. It explains, in a condensed form and plain language, the problem that the proposed project is intended to solve, the major considerations, the resources required to complete the project, the desired outcome, the predicted return on investment and a projection of when that ROI should be achieved. Because some stakeholders may only read the executive summary, it's crucial to include any information that is essential to an informed decision. Like the abstract of an academic article, the executive summary is presented as the first part but written after the rest of the document is completed.
The problem statement
This section is a straightforward articulation of the problem that the project is supposed to solve. It identifies the area or areas where there are issues that need to be addressed, such as inefficiencies, missed opportunities, unacceptable market performance or unfavorable consumer response to a product or service.
Analysis of the situation
This section describes the situation behind the problem in more detail and how the situation came about. Finally, it provides general projections about potential events if the current situation continues. The conclusion of the analysis should lead naturally to the next section.
In this section, you identify potential solutions to the problem and describe them in sufficient detail for the reader to understand them. If, for example, the solution proposed is the implementation of desktop virtualization, you would define the term and discuss the use of the technology within your industry. For most problems, there are multiple solutions possible and you should explore all solutions that are potentially the best option.
This section describes the project, including all the resources required for its implementation, the project budget and a timeline with measurable goals for all project milestones. List any assumptions that the reader should be aware of, such as, for example, that government regulations pertinent to the project will not change. You should also list any dependencies, such as completion of other projects or the availability of key individuals. Note any risks involved with the project and briefly sketch a plan for dealing with them. In the budget section, include financial projections for relevant metrics such as ROI and total cost of ownership (TCO). You should also include a figure -- usually an additional 15-20% of the total -- for scope creep. Identify and describe all stages of the project, including a post-project review. Include measurable criteria to determine the success of the project.
This section evaluates the costs and benefits for all options, including the proposed solution to the problem and any likely alternatives -- which include, of course, taking no action at all. Illustrate your case with data from similar projects and case studies, if possible. Charts and graphs are often included in this section or may be in an appendix at the end. In any case, graphs can illustrate points that are hard to extrapolate from text-based data, so be sure to include as many as will be helpful. The cost-benefit analysis should include the projected financial benefit to the company and a projection of when that payoff is expected.
In this section, you make your recommendations for the project and how it is to be conducted. The recommendation for implementation is a brief restatement of compelling results of the cost-benefit analysis and a final statement that you believe the project should go ahead. Articulate the circumstances under which it should be undertaken, including key individuals and actions. Include a recommendation for scheduled reexamination of the project status. If there is any question as to the availability of key resources, make that clear. Include a recommendation for regularly scheduled reexamination of the project status. Refer the reader back to relevant document sections and graphical presentations where it might be helpful.
Before you present your business case
Check your document content to ensure that it's well-constructed and includes all the key elements. Following is a sample business case checklist:
- Does your problem statement follow naturally from the analysis of the situation?
- Does the problem statement clearly indicate that action should be taken?
- Is your list of potential solutions to the problem adequate? Does it omit any solutions that should be included?
- Is your project description detailed enough?
- Are the data and calculations in the budget section correct?
- Do you have enough supporting data in your cost-benefit analysis?
- Have you approached at least one major stakeholder for preliminary support?
- Does your executive summary include all the essential elements and follow the same order as the complete document?
Because every project is different, there may be elements that are important to your particular business case. This is a good point at which to step away from the document, put it away and return with fresh eyes. Add any new items that occur to the checklist and determine if you've satisfied their requirements. Once you've checked off all the items on the list and adjusted the business case document where required, read your document over carefully for clarity. It should flow logically and read well, and it should be free of grammatical and spelling errors. Run spell check -- but keep your eyes open for the types of errors that spell check misses. Finally, have at least one other person read the document over with a critical eye.