Overview of a Business Case
Typical Stages of a Project
The key elements of a business case are:
- The identification, quantification, validation of the opportunities.
- The financial payback with quantifiable potential benefits and costs of the proposed changes.
- The assumptions, constraints, risks and timing of cash flows.
This section sets out a more detailed description of the tasks that need to be undertaken to prepare a business case.
- Identify and confirm the format of the business case with the Business – this includes time frames, the desired level of financial analysis, the required degree of accuracy, any assumptions, presentation, identification of stakeholders, organisation resources.
- Identify the expectations of management : attitude to hard and soft potential benefits – identify key decision makers, review existing process for project justification, develop straw-man model for business case framework, develop straw-man review and authorisation process, validate the business case approach with the Project Committee.
- For each project identified in the business case framework, identify the detailed cost profiles and the rules of calculation.
- Develop a benefit profile for each project (cost focused as well as revenue focused) and the method of calculation – include opportunity description, evidence of validity, assumptions, scenarios, sensitivities, risks, constraints, confirm performance measures and link to benefit areas.
- Validate the information with the business stakeholders responsible for delivery of the potential benefits, identify preferred scenarios.
- Create a financial model to consolidate individual project information into a single summary.
- Specify a potential benefits tracking mechanism to track the costs and potential benefits established in the business case.
- Present the business case to the Project Committee to ensure agreement of the final presentation.
- Alter the Business Case to reflect the scenarios agreed upon by the Project Committee.
- Present the final business case to the Project Committee.
- Communicate the business case to the organisation.