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Business Case

Marks: 5M

Year: May-12, Dec-13

• 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 sometimes come in the form of a short verbal argument or presentation.

• The logic of the business case is that, whenever resources such as money or effort are consumed, they should be in support of a specific business need.

• Business case depends on business attitude and business volume.

• Business cases can range from comprehensive and highly structured, as required by formal project management methodologies, to informal and brief.

• Information included in a formal business case could be the background of the project, the expected business benefits, the options considered, the expected costs of the project, a gap analysis and the expected risks.

  Reasons for creating a business case:

  Business cases are created to help decision-makers ensure that:

• The proposed initiative will have value and relative priority compared to alternative initiatives based on the objectives and expected benefits laid out in the business case.

• The performance indicators found in the business case are identified to be used for proactive realisation of the business and behavioural change.

  a Key elements of the Business Case report:

  A good business case report, which brings confidence and accountability into the field of making investment decisions, is a compilation of all information collected during enterprise analysis and the business case process. The key purpose is to provide evidence and justification for continuing with the investment proposition. Here is a recommended structure:

  1 Preface

  2 Table of Contents

  3 Executive Briefing

  1.1 Recommendation
  
  1.2 Summary of Results
  
  1.3 Decision to be Taken
  

  d Introduction

  i. Business Drivers

  ii. Scope

  iii. Financial Metrics

  e Analysis

  i. Assumptions

  ii. Cash Flow Statement (NPV)

  iii. Costs

  iv. Benefits

  v. Risk

  vi. Strategic Options

  vii. Opportunity Costs

  f Conclusion, Recommendation, and Next Steps

  g Appendix