Business case

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The purpose of a business case is to explain or reason for starting a project, thus it is there to “make a case” for it. It can be seen as a sort of business proposal. It includes the description and evaluation of quantifiable aspects of a project or investment. The business case analyzes the project costs and the returns that can be achieved through the project results. It supports decision making and planning and also serves as a guideline to manage and control projects. It is different from a business plan in that the latter analyzes and evaluates corporate objectives and key competencies. A business case aims at assessing a project's or investment's objectives. It estimates the breakeven point at which the investment will result in profits for the stakeholders.

Additionally, a business case describes the customer benefits deriving from the project. It holds the idea that whenever a resource is spent, whether it is money or effort, it should always serve a purpose for the specific project needs. The business case information can be used as sort of a project’s backdrop to which the project leader and team can always refer back to and which helps make them accountable for their decisions. Therefore, a good business case shows which factors are critical for success, which contingencies are most important and helps forecasting and mitigating risks and delays. The following should be considered to build a successful business case:

  • Topic and Objectives;
  • Assumption and Key Financial Ratios;
  • Cost Model, Value Proposition: Risk and Sensitivity Analysis;
  • Stocktaking etc.

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