What is a Business Case?

A business case 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. – Wikipedia

For our understanding let’s assume you create a formal Business Case document instead of a verbal agreement.

Broadly speaking, in a Business Case you do the following activity:

• Present a problem or opportunity
• Provide a list of probable solutions (based on cost-benefit analysis, ROIs, recommended or not and the reasons, etc)
• Recommend a solution

Example from Wikipedia:

An example could be that a software upgrade might improve system performance, but the “business case” is that better performance would improve customer satisfaction, require less task processing time, or reduce system maintenance costs. A compelling business case adequately captures both the quantifiable and non-quantifiable characteristics of a proposed project.

Who creates a Business Case?

This document could be prepared by a Business Analyst but is usually the responsibility of high-level Business Executives or Managers.

A Business Analyst (functional or Business-side) usually assists in the creation of a Business Case.

When is it created?

It is very guessable 😉 Prior to project initiation.

You can think of a Business Case as a sales technique to sell the Business on the advantages of a project (i.e to realize benefit – solve a problem or achieve an opportunity) and convince them to allocate budget and resources for the project.

5 Phases to an Effective Business Case

Phase 1: Initial Analysis

Phase 2: Determine Potential Solutions

Phase 3: Write the Business Case

Phase 4: Review the Business Case

Phase 5: Present the Business Case

Phase 1: Initial Analysis

* Rigorously and Meticulously understand the Problem or Opportunity

• Fully understand and find the root problem
• Identify who and what it affects
• Detail each component of the problem
  • Your recommended solution should solve each component of the problem and not just the high-level components (final or few important components)

* Identify high-level requirements

• They are not detailed requirements similar to the ones found in BRD
• They are very broad just to give us a basic understanding on how to solve the root problem
• Initial analysis along with a few more additional questions should give us a good high level requirements

* Identify the data needed to support the business case (ROI)

• Find data that will help you to sell the idea and the ROI
• The 2 important things a Business Case should achieve is
  • Convince the business to take action regardless of the action by proving to them a presence of a problem
  • Convince them to choose your recommended solution

You have to investigate and analyze and find information (data) to support the above points

E.g.

ABC Corp is losing sales from its website generated leads because their competitor can contact them faster.

The following flaw in the system is identified:

The CRM admins have to “manually” enter the lead info in the CRM software and this slowed down the whole process drastically.

Once you have identified the problem you have to find data to support our case:

Data: Time between lead inquiry on the website and sales rep receiving the lead notification – 8 hours.

You have to also identify data that would prove the potential solution solves the problem.

Data: After careful discussion, the agreed time is 15 mins; the acceptable delay between the lead inquiry submission on the web portal and the lead creation in the CRM system

* Confirm with decision-makers the high-level return is worth the potential investment

By now you have:

• Understood the problem
• Created high-level requirements
• Gathered data to support your project and justify by the ROI

Before proceeding to create a Business Case, validate your current progress with the decision-makers because:

• • The problem may already have been solved somewhere and you could reuse it
  • They have already determined that solving the problem will cost more than the benefit received
    • E.g.
    • Let us assume that there is a fictitious process in which a single user is assigned with the task of emptying the closed-lead record every week.
    • It is a manual process in which the user has to just select the records and move them into another directory. It takes the user just 10 seconds each time i.e ~9 mins a year
    • To solve this problem you figured out 2 solutions

1. 1. 1. 1. Do nothing
         2. Automate the system

• • • Assume you plan to automate the system and the potential solution takes 20 hours to build. It will take approximately 133 years to just break even.
    • At this point, you understand that there is no point to do anything and so you don’t bother to proceed with the Business Case.

* Sanity Check

Internally with yourself check the likelihood of the project being approved and whether you should continue with the Business Case

Phase 2: Determine Potential Solutions

Identify and list all the potential solutions.

Do not skip any solution, however trivial.

One of the solutions could be to take no action. There is a cost involved even when there is no action and hence it should be listed as a solution.

E.g. There is a regulatory requirement from the government. You identify that not taking any action and paying the fine is cheaper than upgrading the system. Though you did not take any action but still have to pay the fine.

Don’t just list the high-level solutions. Add important facets to each solution that will help make a decision to choose the best solution.

Important facets:

• • Benefits
  • Costs
  • Timetable of project
    • If the project requires cutting edge tech then the time will increase due to time required to do research and become efficient with the new tech
  • The time before the ROI is realized
    • E.g. In the aforementioned example, it would take 133 years before you break even. Plus systems usually get outdated in a few years so you would have never got returns from this project.
  • Risks
    • E.g. For a particular project, the timetable is short and the cost is low, however, since there is a poor understanding of the backend it may break the system. So that could be a risk and should be mentioned.

Phase 3: Writing the Business Case

Most of the time the company will have a formal template to write a Business Case.

The key components of a Business Case document are:

Executive Summary

• It gives a brief summary of all the important components of the Business Case i.e problem statement, brief analysis, potential solutions and the recommended solution.
• It gives a ten-thousand-foot view of the document to the busy executives so that they can have a quick review of it in a short time e.g it can help them to also prepare for a presentation if they didn’t get time to review the whole Business Case
• Preferably written last after the entire Business Case is written and explained in a couple of paragraphs

Problem Statement

• A statement that clearly defines the problem or opportunity succinctly and without any ambiguity

 Analysis

This section explains

• What you did
• What you looked at
• How it went
• What you found

You fetch data from the analysis done earlier

• The detailed analysis of the current system
• The problem or opportunity with the system
• The approach to realize the benefit (solve a problem or achieve opportunity)

Solution Options

• List all the available solution options to realize the benefit
• List all the pros and cons of each available option based on facets like cost-benefit analysis, ROI, etc.

Recommended Solution

• Your recommended solution and why

Phase 4: Review the Business Case

Ensure the problem statement justifies a call to action

• • Describe the problem statement strongly
  • Support it with facts and figures

List all the valid solutions

• • Don’t be biased to your recommended solution
  • Provide all the potential solutions to the business with the right facts and figures and help them to arrive at a decision

Thoroughly check all the facts and figures on the document

• • Ensure all facts and figures are double-checked
  • If an error is found during the presentation it will harm your credibility
  • E.g. Especially the cost-benefit analysis

Objectively dissect your recommendation

• • Avoid preferring a “cool” solution because you are personally motivated to go that approach
  • Analyze and compare what is best from the business’ perspective and choose a recommended solution

Rectify grammar and spelling errors, if any

Ask another person review of the document

• • It may help discover mistakes repeatedly overlooked by you

Get project buy-in from two key stakeholders

• • Preferably from non-decision-making stakeholders
  • Ask someone whom the project will benefit directly to review it and if it genuinely helps them then to also support it

Phase 5: Present the Business Case

Remember, except for you everyone is seeing the Business Case for the first time

• Don’t assume they must have reviewed it prior to the meeting even if you attached it in the meeting invite
• Since you’ve worked on it for a long time you may have a tendency to skip the high level and dive straight into the details. This may make the stakeholders lose interest and getting their approval will become difficult. Hence, give them a general overview of the problem and possible solutions before you dive deep.

Describe the problem concretely that compels the business to take action on it

• Provide facts and figures as evidence to support your case
• If the stakeholders don’t “believe” there is a problem then they’ll not take action. Sell to them there is a problem.

Provide your recommended solution

• Explain your reasons for the recommended solution
• Explain ROI for the recommended solution
• Also, touch on other potential solutions mentioned in the document  and why they were discarded

Mention Risks

• Make everyone aware that there is risk involved
• Don’t dive deep into it unless asked

Mention your stakeholder backers

• Show that you’ve got the support of a few stakeholders who will benefit from this project
• If any of those stakeholders have previously backed a project and the project was successful then it’ll add to the credibility of your Business Case too

End the presentation

• Summarise
  • Why is it important to solve the problem
  • What would be the benefits realized by taking action on your recommended solution
  • The ROI timeline

The post is  based on my notes and understanding from this BA tutorial