Why a Business Case is Important to Projects
Understanding why a business case is so important is an integral part of successful project management. As the cost and complexity increase, so does the importance of the business case. They are used in business, municipal and community projects, and not-for-profit groups.
The purpose of the business case is to outline the rationale for undertaking the project, and to define the parameters and management factors involved in the project itself. It provides the project manager with a tool to guide the design, management and evaluation of the project.
The business case serves three purposes: it provides the project manager the opportunity to think through the project in a systematic, step-by-step manner; explains why the project should be undertaken; and provides a framework for completion of the project on time and on budget.
While the business case may be presented in various formats, there are certain elements to include in any written document. Knowing why a business case is important becomes evident as the project develops. Be sure to present the business case in a manner that will create a favorable impression on the program administrator.
Elements of a Business Case:
Title Page is the first impression a reader gets of a business case. Ensure it is simple, neat and orderly, easy to read and balanced.
Table of Contents lists the major headings and the page on which each is found. This will be the last section completed, but is placed following the title page.
Executive or Project Summary is the first and most important selling tool. It is where the critical impression of the project is created. Therefore it is important to summarize the most important elements of the project in a concise and compelling manner, and keep it to two pages at most. Explain the reason for the project and what the benefits will be.
Mission Statement is a concise, general statement of what the project manager intends to achieve by completing the project. In one sentence it explains what is to be done, for whom, and why.
Objectives of the Project must be stated clearly; one short statement for each, without accompanying arguments or documentation. Objectives are Specific, Measurable, Achievable, Realistic and Timely (S.M.A.R.T.).
Performance Measures evaluate the success of the project, by indicating how the project will meet the objectives listed at the beginning of the business case.
Needs Assessment can identify a problem and explain why the problem needs to be corrected, or illustrate the purpose of intended changes. It provides the information as to whether the project should be undertaken at all. The report, in abbreviated form, becomes part of the business case.
Technical Analysis outlines the technical information used to make the decision, and tells why the proposal represents the best or most cost-effective solution.
Project Work Plan spells out the terms that will form the basis of any contracts, including the jobs to be done, the time frames and milestones. It also names those responsible for managing the project and contracts as soon as they are known. While you will use a detailed work plan listing subcontractors, detailed processes and reporting mechanisms to manage the project, it is not necessary to include this in the business case.
Financial Plan shows how the project will be financed and how returns, if any, will be credited. Give an explanation of why program funding is necessary and how funds will be used in the introductory paragraph.
Understanding whay a business case template helps to develop the project plan. It also shows that the project management has thought through the entire project thoroughly. The managers will be confident the right decision has been made, and that designated people are in charge of each step of the process.