Creating a business case requires time, thought and effort. In simple terms, a business case provides justification for a specific project or programme. In a budget-conscious, results-oriented world, it is no longer enough to simply deliver what you promised. Now, you also need to be sure that what you propose justifies the investment of time and resources needed to create it.

The business case focuses on the value that a project or programme brings to an organisation. In spite of the use of the word business, it is equally applicable to non-commercial organisations, such as government entities and non-profits, where it is sometimes referred to as a “ use case statement”.

What is the purpose of the business case?

The aim of the business case is to justify the existence of the project or programme. It should clearly demonstrate the value of the work being done and the deliverables being created. The business case is outlined during the concept phase of the project life cycle and is used to assess whether the project should go ahead.

Preparing the business case is generally the responsibility of the project manager. Often, they will have input from other experts and specialist agencies. Once the business case is approved and the project moves forward, the business case must be regularly updated to reflect any changes to the project as a whole. It is used at gateway reviews to ensure that the project is continuing to progress in a way that will deliver the required value to the organisation.

What should the business case include?

While the focus of the business case is on the value that a project or programme will bring to the organisation, this must be put in context. A business case will usually include information on:

The problem or situation that led to the project being considered

• Why the project is needed
• What might change about the situation that could make the project unnecessary
• An options appraisal setting forward options considered, and options chosen
• An appraisal of the “do nothing” option – what is the scenario if no action is taken?
• Expected results and benefits, and their value to the organisation
• The timescale in which the benefits are expected to be delivered
• How the project team will assess whether benefits have been realised
• Any unavoidable dis-benefits, with justification for why they are acceptable
• Costs and funding arrangements
• The risks involved, and their impact on the business case

The benefits review plan

Assessing whether benefits have been realised is an essential part of the business case. This is mentioned above, but it is important enough that it generally gets its own separate document, known as the benefits review plan. This should be developed by the project manager alongside the business case and should be updated as the project progresses through the project life cycle.

The benefits review plan identifies specific benefits to be measured. These are taken directly from the business case. It should also state how benefits will be measured, who will be accountable for measuring them, and what information and data will be needed by those accountable. It will also state when the benefits assessments will take place, who will carry out these reviews, and what the baseline measurements are, in order to measure improvement.

How a business case benefits the organisation

Every project undertaken should clearly benefit the organisation. The business case demonstrates in advance exactly why a project is being put in place and how much value the successful completion of the project will add to the organisation as a whole.

The business case encourages the project manager and team to focus on not just what they are building, but also how it will be used. It helps the organisation avoid wasted resources on projects that do not yield a justifiable amount and quality of benefits. It also allows the organisation to prioritise multiple projects, by making the immediate value of each project clear.

How the business case works

The business case is a guide and reference point, before, during and after a project. Before the project begins, the business case establishes and justifies the goal of the project. It puts the outcomes of the project in context, by clearly stating not just what needs to be achieved, but also why it is necessary.

During the project, the business case remains central to day-to-day project management decisions. When different options present themselves, the project manager can refer to the business case to ensure that the chosen option not only moves the project closer to the deliverables, but also closer to the real values to which those deliverables are aiming to contribute.

After the project, the business case allows for an assessment based on actual value added to the organisation. Instead of measuring success based on whether the deliverables were completed, the organisation can easily assess whether the expected benefits were delivered. If not, then why not? Perhaps benefits were not accurately estimated, or maybe the deliverables developed were the wrong ones, incomplete, or badly implemented. This allows the organisation to learn valuable lessons.

How the business case creates project success

The business case can be the guiding light that creates project success. Communicated clearly, it can keep the entire team focused not just on their tasks and deliverables, but also on how they are providing the value that is at the heart of the change they are implementing. The proper development and maintenance of the business case allows for:

• A clear definition of the value that a project is intended to deliver
• A way to prioritise projects and ensure that resources are used to deliver real value
• An ongoing way to assess whether the project is worth continuing
• A tool to facilitate decisions on when and how the project plan needs to be changed
• A well-managed business case substantially increases the chances of a project being completed successfully, to the satisfaction of all stakeholders.