CXO

How to develop a business case for your project

Before any project gets off the ground, you will need to be able to develop a sound business case to present to decision makers. Here's everything you need to know.

A business case is the first step in gaining approval for a project. Regardless of how small a project may seem, it is important to take the time to consider why the project is worthy of time and finding resources.. This may seem like an unnecessary and time-consuming step, but it can increase the chances of getting a project approved.

What is a business case?

In short, a business case is a comprehensive document created by the initiator of a project that details and justifies the business need for the project and why it should go ahead. The business case is reviewed by key decision makers who will determine if a project will be approved and allowed to proceed or denied. The following is a list of everything a business case should include.

SEE: Quick glossary: Project management (Tech Pro Research)

An executive summary

This is a brief high-level description and summary of what is in the business plan. It makes it easy for executives and other key decision-makers to quickly understand what to expect in the document and is used to capture their interest.

A statement of the problem or opportunity

This section of the business case helps decision makers understand what the opportunity or issue is and why they should be interested in reading further about the proposed project. Projects are typically initiated to:

  • Resolve a business problem
  • Take advantage of an opportunity
  • Deliver a product or service based on the request of a customer
  • Address a legal, legislative, tax, security, or other type of governance requirement.

An analysis of the problem or opportunity

In this section, you should present your analysis of why the problem exists or how an opportunity came about. It should also identify any risks to the business or department if the project does not go ahead. Make sure to include facts as well as support for those facts that affirm the need behind the project proposal.

A list of possible solutions

The business case should identify the potential solutions. These should be clear and realistic. In this section, include not only the solution(s) but also information that describes how and why these are considered solutions.

An analysis of costs vs. benefits

To make an informed decision, executives need to know all-in costs as well as the benefits of a project to the business. They will also want to know the tangible and intangible costs to the organization if the project does not proceed. As with the problem and opportunity analysis section, make sure to include facts that support any claims or assumptions.

SEE: IT project cost/benefit calculator (Tech Pro Research)

Recommendations

This is the section where you provide your recommendation regarding the solution you are proposing and why. Support your recommendation with facts and figures whenever possible. Also explain why this solution is better than other possibilities.

The project proposal

The project proposal section outlines key information about the actual project such as the scope, the timeline, the costs, and resources required to successfully execute the project.

Business cases can differ in length and composition depending on the size, nature, or complexity of a project or organization. The key is to ensure that you have factored in at least these five things:

  1. Why a project is needed.
  2. What prompted the need for the project.
  3. What resources and funding are required.
  4. How the project will be implemented.
  5. What the final impact or benefit is to the organization.

Once the business case is approved, the information from it will be transferred to another key project management document called the project charter where it will be expanded upon further.

Also see:

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Aida Koric, Getty Images/iStockphoto

About Moira Alexander

Moira Alexander is the author of "LEAD or LAG: Linking Strategic Project Management & Thought Leadership" and Founder & President of Lead-Her-Ship Group. She's also a project management and IT freelance columnist for various publications, and a contr...

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