2.1.4 Business Case Flashcards
What does a Business Case do?
A business case provides a recognised framework through which project spending proposals can be recorded, reviewed and audited to learn lessons about how efficiently the organisation is deploying funds to achieve its targeted returns.
The Business Case will show the level of investment required, the change intended and the resulting benefits.
What are the typical contents of a business case?
Background/situation
Benefits
Budget
Risks
Options appraisal
Additional content
Business case content: Background/situation details
Why project is needed - environment analysis, market situation, output of research or studies.
These backgrounds details clearly state the problem, opportunity or business need the project means to address.
Business case content: Benefits
An agreement of how the benefits will be realised and measured, stakeholder involvement is crucial to gauge feasibility. Stakeholders should understand operational and ongoing maintenance requirements to enable acceptance and use of the benefits.
Business case content: Budget
Funds consumed by delivering project. Contingency included.
As project progresses more granular cost estimates will be produced and considered.
Business case content: Risks
Business case risks are important to identify. It’s difficult to identify risks in long time scale projects.
Without proper risk mitigation strategies projects may be abandoned or a less risky strategy pursued.
Business case content: Options appraisal
Justifies the chosen option to proceed.
Strong business cases have considered a range of options.
Best not to be over reliant on a single idea, reflecting on options related to available funds.
Doing nothing is also an option.
Final business case is approved because it’s the strongest option in relation to alternatives.
Commonly options are subject to financial appraisal in relation to cost, timeframe and the phasing of return value.
Business case content: Additional content
Timeline, success criteria, stakeholders, constraints, assumptions, dependencies, and details plans.
Roles of project sponsor in relation to developing a business case
Appointed by steering group
Business case owner
Lead business case during early development
Roles of Project Manager in relation to developing a business case
Appointed by project sponsor
Accountable for the business case realising the benefits planned
Roles of a Functional Manager in relation to developing a business case
A functional manager, is usually the sponsor, is needed on smaller, internal projects. Relying on the input of others in the organisation to form the business case content.
Roles of the steering group (project board) in relation to developing a business case
Steering group members are corporate management
Monitoring organisations internal and external business environment
Exploring change options
Approves business cases
Releases funds allowing the project to proceed
Other key contributors to developing a business case
Users: insight and perspective
Business analyst: linking the project, stakeholders, internal and external enviroments
Subject matter experts: procurement, HR, finance, technology
Suppliers: anyone contributing to the writing and value of the business case.
Benefits Management
Identification, definition, planning, tracking and realisation of business benefits.
A benefits management plan ensures that there is a proactive management approach to maintain a focus on benefits driven change throughout the projects life.
