The blueprint for developing a business case

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How to write a business case

Transcript

Welcome aboard the Knowledge Train. In this podcast we explore insights and tips to help you manage your way to success in your career and business. I’m Simon Buehring, your conductor on this journey to knowledge, and I’m thrilled to have you with us today.

In this episode, we’re going to demystify the process of crafting a business case. Whether you’re overseeing a hefty corporate project or considering a personal investment like a home move, understanding how to articulate the value and viability is essential. So, sharpen your pencils and let’s get ready to lay down the tracks of a persuasive business case.

Imagine you’re about to embark on a project, something significant, something that’s going to require a substantial allocation of resources. The cornerstone document that stands between your vision and its realisation is the business case. It’s what convincingly explains why your organisation or you personally, should invest time, effort, and resources into a venture. Without a solid business case, your project risks not delivering a return on investment. Crafting a business case is a talent often honed on a business analyst course, and today, we’ll walk you through the process. With a couple of business case examples and a free template in hand, we aim to turn you into a pro at advocating for your projects.

So, what exactly is a business case? It’s your project’s defender, laying out the justification for undertaking it. A well-formulated business case will scrutinise the timeframe, costs, and risks of an activity, stacking them against the anticipated benefits. It’s not unlike weighing pros and cons before making an informed, sensible decision. It’s such a fundamental concept that you’ll find it at the heart of the finest project management courses out there.

And it’s not just in the boardroom where a business case makes its mark. Even in our private lives, a personal business case can be invaluable. Deciding to move house, for example, isn’t just about desire—it’s about calculating the financial, temporal, and risk elements against the gains, like a shorter commute or better schooling for the kids.

Rash decisions and vanity projects have no place in the world of project management. For businesses, the rationale for a project often boils down to cold, hard cash—what financial rewards will this endeavour bring? For public organisations, value for money might be the guiding star, delivering societal benefits efficiently and effectively. With a finite budget and never-ending project proposals, the business case becomes the crucible in which ideas are tested and only those most aligned with strategic goals survive.

From project sponsors to executive boards, business cases are versatile tools employed across various management layers. Not only do they validate the commitment to individual projects, but they’re also instrumental for portfolio management offices tasked with cherry-picking projects that support strategic objectives. A well-articulated business case must precede any significant allocation of resources—it’s the green light that signals readiness for takeoff.

Business cases come in all shapes and forms, whether digital or on paper. While tools like Microsoft Office are common for creating one, a business case could also emerge from a scribble on a whiteboard or even, quite literally, on the back of a cigarette packet. The key is brevity and relevance—cut through the noise and lay bare the essential information for those with decision-making power. And remember, in the world of project management methodologies like PRINCE2, a robust business case is a linchpin for decision-making.

Let’s take a look at two contrasting business case examples. The first is something you might relate to from personal life decisions, and the second zooms in on a more corporate, business-focused project.

The first business case example is that of moving home. Imagine you and your partner are contemplating a move. The starting point for your business case? Identifying the reasons for the move. Then, it’s time to explore options, from shifting jobs to finding a new school. Benefits are your expected returns—in this case, a better education for the kids and more family time.

Understanding how long investments last and when you’ll reap the benefits is paramount, be it the three months to move or the five years before the kids graduate. And don’t forget the costs, calculated over the period you expect to enjoy those benefits. The couple here also considers risks, such as losing touch with friends, before measuring up the costs against benefits to make a sensible choice.

The second business case example is that of a company’s handheld device project. Picture a heating repair company that’s still paper-based, bogged down by inefficiencies and errors. Their business case includes an executive summary that highlights key benefits of switching to handheld devices. Reasons for change are clearly defined, as are the options considered, with a nod to the preferred route. Benefits must be tangible and measurable, but we also look at outcomes—the direct results of the project—and dis-benefits, like the negative impact on back-office staff morale. Then we assess timescales for completing the project and the horizon over which to expect benefits. With costs tallied and risks evaluated, the investment appraisal—in this case, net benefits—shines a light on when the company can expect a return on its investment.

To summarise, whether we’re talking about moving home or launching new company initiatives, a business case is that critical document that justifies the investment. It sets the scene, outlines the play, and ultimately determines whether the curtain rises on a new project. Short and sharp is the recipe for an effective business case, cutting through to the essence of what needs to be said to make that all-important decision to commit resources.

Thank you for joining us on the Knowledge Train as we explored navigating the creation of a business case. Don’t forget to subscribe for more insight-packed episodes, and swing by the Knowledge Train website for resources galore. Until the next episode, keep learning, keep managing, and I’ll see you further down the track. Goodbye!