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Developing a business case

By Blair Witzel
September 4, 2007

Introduction

If you have ever pitched a project idea, you have likely been asked what the business case for the project is. This is the person’s way of saying, “What’s in it for me?” Developing a business case is your opportunity to tell that person what is in it for them - and more importantly, for the organization.

A business case is similar to a project proposal because both pitch a project idea. The key difference is that a project proposal is usually pitched to a potential, external funder, whereas a business case is developed internally so that your organization or employer understands the benefit and impact of delivering a particular project.

The current article provides an outline for a business case so that you can present your winning project idea to your organization.

Key benefits of a business case

There are many benefits to creating a business case for a project, but I feel that there are two that stand above the rest. The first benefit is that creating a business case will help you crystallize your thinking about the project. Why are you delivering the project? What are you going to deliver? How will you do it? These are all questions that are addressed in a business case, and answering them will help you better understand the relative importance and impact of a project and what it will involve. Oftentimes, the business case helps the person refine a vague notion into a concrete project idea.

The other key benefit of a business case is communicating with your organization’s management and board. A strong theme within these project management articles is communication. Communicating with a project’s stakeholders is critical throughout the life of the project, including at the very beginning. The business case provides you with a framework for communicating your project idea in a way that is succinct and impactful, and will help to ensure support for your project.

Contents of a business case

So what goes into one of these things anyway? I am sure there are as many structures for a business case as there are people who have written them. However, they all boil down to the same basic information:

1. Need or Opportunity

• What is the problem you are trying to solve or what is the strategic opportunity that you are trying to pursue? Why are you doing the project?
  
  
• The need or opportunity can usually be summarized in one or two sentences.
  
  
• For example, research may have found that a key barrier for newcomers finding employment in Canada is Canadian work experience. Providing them with even introductory work experience will increase their chances of finding work in their field. This is the need that we are trying to address.

2. Goals and Performance Measures

• Goals identify the particular outcomes that you are trying to achieve with the project. There are many ways to achieve the same objective. How will you do it?
  
  
• In the above example, we are going to address the need of newcomers needing Canadian work experience. There are many ways to achieve this. We could create an organization that hires newcomers to provide them with experience. We could connect them with existing organizations to do paid internships. What is the goal of our project?
  
  
• The performance measures are indicators of success. How do we know that we have been successful? A good performance indicator for this project would be that newcomers participating in our project would receive permanent, full-time employment earlier than those who did not go through our program.

3. Environmental Scan

• You should also look at what some other organizations are doing to address the problem or take advantage of the opportunity. This will give you some good ideas about the approach you should take and help ensure that you don’t re-invent the wheel. You may also benefit by learning from their success and mistakes.
  
  
• The environmental scan should also look at the larger political and cultural context in which your project will exist, which can have a strong effect on the outcome of your project. For example, there may be a government initiative that funds programs providing work experience to newcomers. This could be a good source of funding for you. You may also find that a significant proportion of newcomers work in a certain field. It would be wise, therefore, to structure your project to give them experience in that particular field.
  
  
• Write a brief paragraph on each of the organizations, projects, or programs that you reviewed. They don’t need to be long, but should briefly describe the project’s major deliverables, outcomes of the project, and any lessons that can be learned from their success or failure. Your organization is much more likely to support your project idea if you have done your homework!

4. Recommended Approach

• In a previous article, we discussed creating a Project Charter. The 'recommended approach' section in a business case is similar to a mini-charter. It will identify the particular deliverables that your project will create in addition to the time, cost, and people required to create those deliverables.
  
  
• The approach section should include the following sub-sections:
  
  
  • Scope
    • A list with a brief description of the major project deliverables.
    • For the newcomer employment project, the major deliverables might be informational packages for potential employers, a marketing program to promote awareness with employers, and placement of 200 newcomers in Canadian workplaces. Provide a brief description of each of these.
      
      
  • Timelines
    • A list of the key project dates.
    • When would it begin? When would it end? When will each of the major deliverables be completed?
      
      
  • Project Costs
    • Because this is just the first step in the project planning process, you will likely not know the exact project costs. However, you need to provide a high-level budget that identifies the sense of scale. Will the project cost in the hundreds or the hundreds of thousands?
      
      
  • Human Resource Requirements
    • A list of roles with a cursory estimate of effort.
    • You need to provide an idea of what types of people would need to work on the project and how much time they will spend on it. Again, it is an initial estimate and will be refined in the Project Charter, but you need to provide some sense of scale.
    • The resource requirements for our project might look like this:
      * Project manager - 0.5 FTE, September 2007 to July 2008
      * Communications person - 0.25 FTE, November 2007 to June 2008
      
      
  • Benefits and Risks
    • A list of the benefits and risks of the project.
    • Identify the potential benefits that will be gained from the project. Why is this the most effective approach for addressing the problem or taking advantage of the opportunity?
    • There are also risks associated with any approach. What negative impact could the project have? What could go wrong?
    • You need to present a balanced view of your project so that the decision makers can make an informed decision about whether your project should proceed.
    • An example of a benefit for the newcomer employment project might be that it not only provides newcomers with Canadian work experience but it also provides them with more social and professional connections in the community.
    • A risk of the project is that there may not be an opportunity to find work placements in the individual’s chosen profession.

5. Alternatives

• There are many ways in which an organization can address a problem or pursue an opportunity.
  
  
• This section should look at some of the alternative ways to do so. Describe the alternative briefly, and list some of the key benefits and risks associated with the option. It is also important to indicate why you did not choose this alternative.
  
  
• For example, to assist newcomers in obtaining Canadian work experience, you could also create your own cooperative organization for employing newcomers. This would give more control over the hiring of newcomers; however, the cost would be significantly higher and would only provide experience in a limited number of fields. Therefore this approach won’t adequately meet the needs of newcomers.

Summary

A business case is similar to a project proposal in that it allows you to pitch a project idea to your organization or employer. It provides an easy and effective way of communicating your project idea in addition to helping you clarify your own thinking about what the project is all about and why you want to deliver it.

The current article draws on many of the concepts that we have discussed throughout this project management article series, and provides you with a quick and easy outline for creating your own business case. But be careful when you write one. You may wind up becoming the project manager of it!

Blair Witzel (blair@mcdoane.com) is a member of the Project Management Institute and a consultant with McDonnell zDoane + Associates, an information management and technology firm focusing on the not-for-profit and public sectors. His work centres on managing multi-project portfolios and working with organizations to develop project management methodologies to more effectively deliver projects.