There are three main reasons for creating a business case:
- To demonstrate the strategic alignment and sense of urgency of the project in question. (Does this project make sense?)
- To define the scope of the proposed project.
- To show the financial and operational benefits associated with the proposed project.
There are also some secondary reasons. A good business case should help:
- Identify risks inherent to the project and strategies for managing them.
- Identify and understand rejected alternative solutions.
- Target resource requirements (other than cash outlay) needed to accomplish the project.
A good business case or proposal should serve as the foundation for an implementation plan or roadmap.
Discalimer: every business case is differnt. Customize to fit your specific scenario. Your mileage may vary. A solid business case should contain the following elements:
- Executive Summary - Provide the operational and financial highlights of the business case.
- Introduction - Explain motivation for proposed project.
- Solution Description - Identify the proposed actions along with scope and time frames
- Benefits Discussion - Identify the expected financial and operational benefits. Do not forget to include on-going benefits. (Size, certainty, and timing.) I would recommend using ranges for benefit estimates and talk about the probabilities of the range of outcomes.
- Costs Discussion - Identifying all costs, in financial and operational terms of the project, both initial and on-going. Due diligence is key. Do not leave anything out. Do not think that you will be able to hold a client hostage after the fact. Unless, of course, you are a big software vendor. Just like in the benefits discussion, ranges are better than absolutes.
- Risk Management Discussion - Identify the risks, all of them, associated with the proposed project and approach for managing these risks.
- Value Creation Discussion - Identify, in financial terms, the value created by the proposed solution.
- Alternative Solutions Discussion - Provide the description, benefits, costs, risks, and valuation of alternatives to the proposed solution.
- Value Measurement Plan - Identifying the approach to tracking and measuring the value created by the proposed project. This is the hardest part...its the least tangible in the professional services arena. How do you define value? Work with your client.
Again, use what is right for you. Go to the depths that are right for you. But this post gives you good, solid, building blocks for crafting a business case that should differentiate you from your competitors who are hopefully only sending along a pricing sheet.