In this article, we are going to talk about the business case. What is it, who uses it, what is its purpose, and how to write one? You will find all the answers below.
What is a business case?
A business case is a document that explains the problem, identifies every possible solution and helps decision-makers choose the best course of action for the business. However, a business case can be created not for business purposes only. You can use it even for justifying any investments you make in your personal life. For example, when you are considering an option to move home to somewhere else. You have to understand the costs of moving, the timescales and possible risks, benefits, etc., and then weigh everything up to make a final decision.
Who uses a business case in organizations?
Actually, such a document is often used by various levels of management within a specific organization, but most often, it is used by a portfolio management office to help it make a decision whether a particular project will contribute to the business’ strategic goals.
Also, a business case is frequently used by sponsors and executives so that they can decide whether to invest in a particular project or not.
How to structure the document?
A great business case example leads the reader through the problem, describes different solutions, and finally decides on the best solution. Therefore, such a paper requires a clear structure to guide the reader. Here are the sections that are typically included in business cases:
You should write this section last, but include it in the very beginning of the document. An executive summary is first and sometimes the only part that the decision-makers read. It is best to limit it to one page and provide brief answers to the main questions. Compile them after writing the rest of the paper. Here are these questions:
- What is the problem/opportunity?
- What is the organization’s benefit in solving/using it?
- How many investments are required?
- When will the investors start seeing benefits?
Problem Statement/Mission Statement
Write a short paragraph to describe the problem or mission of the business. Ensure it is related to the strategy of the organization. Therefore, you can highlight how solving the problem or using an opportunity is important for the business.
Here, you should provide an in-depth description of the problem/opportunity, and why it is crucial to address it. Include any analysis carried out by you or other people to identify the reasons for or the effect of the problem. Make sure to support your claims with evidence. Do not forget to mention everyone who has contributed to this bulk of work.
Describe every possible solution to the problem. Among the other components of a business case, you should also mention the option of “to do nothing.” For all of them, provide an analysis of:
- The approximate timescale for the project
Make sure your analysis is realistic and supported by reliable data. When you include evaluation, base it on trustworthy sources that should be cited.
Note the recommended solution. Provide details of the preferable option. Include the outline of the project. Sum up the essential activities and provide the timeline. Break up the plan into stages and give answers to these questions for each step:
- What is required?
- How should things be done?
- Who does what?
- When should it be done?
Also, it is a good idea to provide information about outcomes and success criteria: how will you know that the project is successful?
Write about the expenses necessary for the project and if it is affordable. Provide a sensitivity analysis, a technique for defining how different values of an independent variable affect a dependent variable.
End by reminding why it is necessary to solve the problem or use the opportunity. Also, explain to the reader what he/she is expected to do after reading, for example, approve the course of action or agree on further work. Emphasize again why your project is the best way to solve the problem/use the opportunity.
How long the business case should be?
While wondering how to write a business case, you may also ask how long it should be. It has to be long enough to provide all the information necessary for the decision-makers to make a perceived choice about whether to invest in the project.
What style and language to use?
Often, your business case is created for the people who have no in-depth knowledge of the subject area. Therefore, your aim is writing in a simple and clear language without jargon. It is preferable to use brief sentences and divide the text into many paragraphs with subheadings. Do not make the paragraphs longer than five lines; leave a line between your passages.
It is also essential to develop a sense of urgency. Comprehensively explain when the decision should be made and why that date is so important.