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The first step you need to take to initiate a project is to develop a business case. A business case is a document which justifies the start-up of a project. It includes:
• a description of the problem or opportunity that exists in the business;
• a list of the available options for delivering a solution to resolve the problem;
• a list of the costs and benefits associated with each solution option;
• a recommended solution option for approval.
The business case is usually presented by senior management in the business to an identified business sponsor or customer. During the creation of a business case, it may be necessary to undertake a feasibility study. This process involves undertaking a more detailed assessment of the current business problem or opportunity, the various solution options available and the likelihood of each alternative solution meeting the customer ’s requirements. The feasibility study adds more rigour to the solution options defined in the business case.
The business case is referred to throughout the project to determine whether the costs, benefits, risks and issues align with those originally documented. At the end of the project, a post-implementation review (PIR) will be undertaken to determine whether the project delivered the business benefits outlined in the business case. In this regard, the success of the project is measured against the ability of the project to meet the criteria outlined in the business case.
Identify the business problem
Perform an environmental analysis
To create a business case, start by identifying the core aspects of the business environment which resulted in the need for this project to take place. Examples include:
• changes to the business vision, strategy or objectives;
• particular business processes or technologies that are not operating efficiently;
• new competitor products or processes which have been identified;
• opportunities resulting from new technologies introduced to the market place;
• commercial or operational trends which are driving changes in the business;
• changes to statutory, legislative or other environmental requirements. You should collate any evidence to support the conclusions drawn above.
Complete a problem analysis
Then describe the business problem or opportunity to be addressed by the project. Write a summary of the core business problem, including:
• a full description of the problem;
• the reasons the problem exists;
• the elements that create the problem (such as human, process, and technology factors);
• the impact the problem is having on the business (such as financial, cultural or operational impact);
• the timeframes within which the problem must be resolved.
Write a summary of the core business opportunity, including:
• a full description of the opportunity;
• any supporting evidence to prove that the opportunity is real;
• the timeframe within which the opportunity will exist;
• the impact that realization of the opportunity will have on the business.
Assess the available options
After defining the business problem or opportunity, list all of the alternative solution options, their benefits, costs, feasibility, risks and issues. Try to minimize the number of options available by conducting a detailed feasibility study. Complete the following steps.
Identify the options
Identify each of the alternative solutions and create a detailed description for each.
Quantify the benefits
Identify the financial and non-financial business benefits to be gained from implementing each alternative solution.
Collate any supporting materials, such as statistical analysis and historical trend analysis, to support the benefits listed above.
Forecast the costs
Identify the business expenses involved with implementing each alternative solution
Assess the feasibility
Assess the overall feasibility of each solution option. A feasibility study may need to be undertaken to identify the likelihood of each solution satisfying the business problem or opportunity.
Identify any risks
Risks are defined as any event that may adversely affect the ability of the solution to produce the required deliverables. Summarize the most apparent risks associated with the adoption of each solution. For each risk, identify the mitigating actions required to reduce the likelihood of it occurring, as well as reduce the impact on the project should the risk actually eventuate.
Document the issues
Summarize the highest priority issues associated with the adoption of each solution. Issues are defined as any event that currently adversely affects the ability of the solution to produce the required deliverables.
List any assumptions
List any assumptions associated with the adoption of each alternative solution. Examples include:
• There will be no legislative, business strategy or policy changes during the project.
• Prices of raw materials will not increase during the course of the project.
• Additional resource will be available from the business as required.
Recommend a preferred solution
You should now compare each of the alternative solutions and recommend a preferred solution for implementation.
Rank the alternative solutions
Identify the assessment criteria required to compare each of the alternative solutions and then agree a mechanism for rating the solutions to determine an overall score. Although a simple rating mechanism (such as applying a score from 1 to 10) may be used, you may wish to weight criteria which are important to the final decision.
Benefits
• Increased revenue (1-10 rating) (1-10 rating) (1-10 rating)
• Reduced expenditure
• Improved efficiency
• Enhanced quality
• Other
Costs
• People
• Physical
• Marketing
• Organizational
• Other
Feasibility
• Technology components
• People components
• Process components
• Asset components
• Other
Risks
• Resource
• Technology
• Organizational
• Other
Identify the recommended solution
The solution option with the highest total score will become your preferred solution. This solution will be explicitly listed in your business case document along with the primary reasons that this solution was chosen over the other potential solutions identified.
Describe the implementation approach
The final activity involved in creating a business case is to provide the project sponsors with confidence that the implementation of the preferred solution has been well thought through. To do this, describe in detail how the project will be initiated, planned, executed and closed as follows.
Project initiation
List the steps involved in defining the project, recruiting the project team and establishing the project office.
Project planning
Describe the overall planning process to show that the project phases, activities and tasks will be undertaken in a coordinated fashion.
Project execution
List the activities required to build the deliverables that create the solution for the customer.
Project closure
List the activities involved with handing over the final solution to the customer, releasing staff, closing the project office and performing a post-implementation review of the project.
Project management
Describe in brief how the following aspects of the project will be undertaken:
• time management;
• cost management;
• quality management;
• change management;
• risk management;
• issue management;
• procurement management;
• communications management;
• acceptance management.
You are now ready to collate all of the materials listed in this section and create your business case document for approval.
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