business case template

This Business Case Template Takes Your Projects to the Next Level

Almost every organization operates with finite resources and business cases determine the allocation of those resources. Therefore, Business Case Development should be a required course in every curriculum. Regardless of your field or discipline, it is crucial to develop the ability to write a compelling argument for your objectives.

Although this article pertains to business cases, the information it contains also applies to noncommercial entities. Government agencies, educational systems, and nonprofits all need tools to determine resource allocation, although they would typically be classified as case statements, instead of business cases.

For example:

  • Marketing often involves competing for resources during the development of new products and ad budgets.
  • Sales often involves adding training and personnel.
  • IT often involves software updates, new systems, and increased personnel.
  • Human resources often involves increasing the funding of recruitment and benefits (to retain employees).
  • Manufacturing often involves adding new production facilities and lines.

 

Several years ago, the brands garnering the lion’s share of corporate resources were invariably represented by the brand managers who developed the most compelling stories and communicated them most effectively.  Today, a business case is the most persuasive way to convey stories to decision-makers.

Business cases can range from detailed applications for program management to brief, informal conversations. Some think of a business case template as an Excel execution.  However, it should be far more comprehensive. Balanced scorecards and strategy maps may help inform the cost-benefit analyses that will drive better business decisions, but they aren’t included in business cases.

Instead, the best business cases provide a set of tools to critically evaluate different options, including resource allocation and strategic decisions. The objective is to deliver results before deadlines, stay within budgets, and produce the agreed-upon benefits. And these benefits should represent the best allocations of time and resources.

In this article, we’ll explain why businesses cases are needed, what the best businesses cases include, and how to construct a business case. We’ll also provide some sample business cases for you. We think our article will convince you that developing a professional business case will make you more convincing and credible throughout your endeavors.

 

What Is a Business Case

A business case is an instrument used to justify a proposed project that requires some type of capital expenditure. It details the allocation of capital and resources to execute the plan, as well as the benefits for initiating the project or task. Once the business case receives management approval, it is maintained as a working document that will be used during and after the project management process.

A well-crafted business case identifies multiple options to address the needs or opportunities of an organization and provides critical data to enable informed decisions by executives.

Business cases can be a comprehensive analysis or a simple, informal presentation. In the following section, we’ll detail the elements of a more highly structured document.

 

The Role of Business Cases in Project Management

Every organization has goals, needs, problems, and opportunities. You may need to solve specific problems, address certain needs, and exploit different opportunities. The solution may require a new initiative, the expansion of an existing operation, or the correction of a poor execution. And as previously mentioned, every organization has finite resources, including a budget.

A business case identifies the reason for initiating a project or initiative, including its value and benefit. It’s designed to ensure that resources are prioritized for the operations and projects that most directly impact the corporation’s greatest priorities.

During this prioritization process, the key element is recognizing the projects that deliver the agreed-upon benefits.

PRINCE2™ is an internationally recognized project management methodology that supports the delivery of benefits. It identifies these key elements of a project:

  • The output, which is any of the project’s technical deliverables (both tangible or intangible)
  • The outcome, which is the result of the change derived from using the project’s deliverables
  • The benefit, which is a measurable improvement resulting from an outcome that’s perceived as an advantage by one or more stakeholders

The purpose of a business case is to both outline the benefits of proposed projects and provide a means for continually assessing and evaluating the progress of the initiative. Therefore, it will become a living document to use before, during, and after the project.

Initially, the business case establishes the rationale for the project and details its benefits. Throughout the execution, the business case measures the progress and overall environment of the initiative, in order to determine if course corrections are required. At the conclusion of the project, a postmortem provides valuable feedback about future executions. endeavors, which  

Specifically, a postmortem will determine if the project has met these agreed-upon benefits:

  • Revenue growth
  • Productivity gains
  • Cost containment
  • New users / improved user experience

It will also identify these slippages:

  • Failure to meet time frames
  • Cost overruns
  • Inefficiencies

Whenever resources are going to be expended, they should support a well-defined business need, with agreed-upon benefits that deliver value to the enterprise. The supporting business case may take the form of a comprehensive document, a presentation, or a verbal agreement.  

 

Business Case Components

A structured business case includes at least the following components:

  • The project background
  • Options for solutions
  • Associated costs
  • Benefits and values
  • A risk analysis
  • The recommended course of action
  • The return on investment

 

Your objective is to thoroughly understand the business’ situation and create confidence and credibility throughout the decision-making process. The very first step is to clearly identify the business problem, issue, or opportunity, including the specific parameters.

The justification for the project will be based on the solution’s benefits and values.

Each business case should regularly be reviewed during execution, in order to ensure that:

  • The original justification for the project is still warranted.
  • The business environment hasn’t changed in a way that would alter the project.
  • The initiative will be able to deliver the agreed-upon benefit.

 

Business Case Components

 

How to Write a Business Case

The objective of a business case is to deliver an objective compilation of the information that decision-makers need to justify the investment of corporate resources. Before creating the business case, it is important to engage others that will have a bearing on the decision and pinpoint cross-dependencies.

To ensure your proposed actions are in line with your corporate goals and culture, you will also want to review your corporation’s mission and vision statements.

Here is our recommended structure:

Executive Summary

Executive Summary Business Case

This high-level, condensed version of the business case includes:

  • The problem, need, or opportunity
  • The options that were considered
  • The required resources
  • The benefits and values to be derived
  • A risk analysis
  • The recommended action
  • The return on investment (Although this section leads the business case, it also needs to be reviewed after all the data has been interpreted.)  

 

Situation Analysis

Situation Analysis Business Case

Use this section to clearly identify the issue to be addressed. It’s the largest part of the business case, as it’s responsible for answering why, what, and how. The background is important, so clearly introduce the problem and solution.

The purpose of this section is to review the context of the problem and solution. Specifically, what is the issue? Why did it occur? How are internal and external factors influencing the problem?

Use a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis to develop your solution. In your analysis, consider technology, and think globally. Is there an opportunity for geographic expansion, or will foreign competition or trade impact your business?

Again, the background is a key way to detail the situation and set the stage for your recommended course of action.

Business Objective

Business Objective Business Case

What do you intend to achieve by initiating your solution, both quantitatively and qualitatively? Be specific about benefits, goals, targets, and objectives. Will your course of action support the corporate strategy, goals, and culture?  

Benefits

Why do you need to initiate the project? Will you increase revenues, contain costs, or improve the user experience? Quantify the benefits that the solution will generate for the organization.

Optional Solutions

Identify and appraise as many potential solutions as possible. Seek input from other stakeholders, and find out where interdepartmental cooperation will be needed. Always include a “do nothing” option.

Cost-Benefit Analysis

Cost-Benefit Analysis Business Case

This section evaluates the financial implications of the project, including the costs and benefits for each of the optional solutions, including taking no action at all. Then recommend your proposed course of action.

This section is written specifically to the decision-makers that will approve the funding, so be sure to address each financial consideration of the project. Provide a comparison of projected costs (including associated costs) and benefits. One difficult part of a cost-benefit analysis is objectively quantifying:

  • The cost of installation
  • The cost of operator training
  • Incremental energy costs, as opposed to the projected benefits
  • Increased capacity, efficiencies, additional revenue, margin improvement, and cost avoidance.

 

For this analysis, the devil is in the details, so you may want to enlist a product or project accountant for more expert financial assistance.

Include a section on the “level” of anticipated benefits, with a range of acceptable achievement. State benefits and values, in terms of SMART (specific, measurable, achievable, relevant, and timely) goals.

Moreover, include a sensitivity analysis. This area concerns potential risks when implementing the plan, and allows the project accountant to look at alternative outcomes if there is uncertainty.

Note: In the “no action at all” scenario, be sure to include notes about potential opportunities and losses. In conservative environments, no action may seem like the safest course, so you should identify the costs of taking no action, as far as potentially missed benefits and value generations.

Market Assessment

market Assessment Business Case

This section provides a thorough assessment of the business environment that your business operates in. How is the market trending? Is your market share expanding or contracting? Have there been any major market disruptions?

How has the competition changed? Is there new technology? Are there new competitors? Do you anticipate any drastic changes to operating margins, due to increases in the costs of materials or transportation?

Include all the factors that can influence your business today, as well as the period covered by your proposed projects.

Risk Assessment

Risk Assessment Business Case

This section summarizes the risks and opportunities that are inherent to the action. How will they be managed? What risks, consequences, and opportunities are involved? Quantify the impact of the risks as much as possible.

Recommendation

Recommended Actions Business Case

Your recommended course of action should directly address the problem. It should provide the benefits and values to be generated, the details of implementation, the scope, the required resources, and the potential constraints. Contrast this recommended course with other potential solutions, and elaborate on why you determined this option to be the best one.

Plan Outline

Plan Outline Business Case

This outline lists activities and detailed timelines, identifies the work that’s required, the departments that will be involved, and the individuals that will perform each task.

Scope & Dependencies

Scope & Dependencies Business Case

This section describes the tasks involved in completing the project, and identifies the cross-dependencies where collaboration will be required.   

Project Organization & Governance

Project Organization Business Case

This section describes the project specifics, including the decision-making process, the frequency of check-ins, and the roles and responsibilities of your creative team.

Project Reporting

Project Reporting Business Case

This section sets up formal progress updates on regular intervals. Reporting also encompasses a postmortem to determine the project’s effectiveness.

Did you meet the agreed-upon benefits? Did the benefits deliver the promised value to the organization? If not, why not? Moving forward, what can be done to ensure better execution? These learnings inform future projects and provide for continuous improvements while executing strategies.

Editing

Although this article may seem very detailed and complex, you should keep the scope of your project and your audience in mind when writing a business case. We suggest you err on the side of brevity. To accomplish your objectives, your business case should be as concise as possible.

Business Case Template

 

Your Business Case Template

Do you want to build your own business case and aren’t sure about the business case format? You don’t need to start from scratch. We’ve created the following simple business case template for you. If you want to get the Google Doc or Word version, fill out this form:

FREE TEMPLATE

Get the Free Business Case Template

SMART Goals Mountain

Sneak Peek:

simple business case template

Outline of the Business Case

I. Executive Summary

This condensed version of your business case addresses all key aspects of the project, with a focus on the rationale behind your recommended course of action and the support of an ROI statement.

II. Situation Analysis

This analysis identifies and provides context for the problem and solution to be addressed. When providing background, consider using another SWOT analysis.  

III. Business Objective

This objective states what you intend to achieve by initiating the project. Include both qualitative and quantitative benefits.

1. Optional Solutions

After consulting with other stakeholders, identify all potential solutions.

2. Benefits

Quantify the value of the desired outcome by using metrics as much as possible.

IV. Cost-Benefit Analysis

This Excel execution determines and communicates the value of the project after all costs are considered. Include a breakdown of all costs associated with executing the project.

1. Benefits

Include all ways to increase revenues and avoid costs.

2. Cost of Project

Include all associated costs.

3. Benefits minus Costs = ROI

V. Market Assessment

In this detailed overview of the market, you will detail your positioning in the market, as well as trends, challenges, disruptions.

VI. Risk Assessment

Identify and quantify potential risks to the success of the project, including ways to manage them.

VII. Recommendation

This statement of your recommended course of action should list the other options and show why you chose this option.

VIII. Plan Outline

Respond to required actions, including when they will be completed and who will complete them.

IX. Scope & Dependencies

Address dependencies and required collaborations.

X. Project Organization

Describe roles and responsibilities.

XI. Project Reporting:

Set expectations for progress reports during the project, and detail the postmortem.

 

4 Business Case Examples That Will Help You Get Started

After reading this article, you want to see a business case example? Perfect. Let’s dive into some of them.

1. Client Management Perspective

Situation Analysis

The creative director realizes that the client-feedback process is delaying decisions, putting timelines at risk, creating additional overtime issues, and causing expensive change orders and revisions.

Business Objective

Streamline the process for client communication and approval. Establish check-ins for the feedback you’ve mutually agreed upon. Make sure that you include specific feedback about the development and execution of the concept. Eliminate duplication of efforts and cost overruns, while improving client satisfaction. Improve client retention, and secure additional projects.

Cost-Benefit Analysis

Detail ways to contain costs and improve profitability. Create a culture of partnership and accountability. Weigh the value you’ll create, as opposed to the incremental costs for additional meetings, time, and travel.

Plan Outline / Project Reporting

Establish a more formal process for providing regular feedback during the developmental stage, including the preliminary concept, storyboard, mid-development, final development, and final product. Before you move onto the next stage, you’ll need to make sure the client provides a thorough review and a signature.

After each major project concludes, perform a postmortem. Did the new process deliver the anticipated results? Were the agreed-upon benefits achieved? Did they create the value as projected? If not, why not? What learnings can be carried into future assignments?

 

2. Human Resources Perspective

Situation Analysis

The HR executive recognizes that the Annual Performance Review is counterproductive. Managers are spending an inordinate amount of time on reviews, and employees are demotivated by the process.

Business Objective

A new software program is recommended to modernize the process, increase employee engagement and morale, and improve retention rates.

Cost-Benefit Analysis

All associated software and training costs are captured. Identified benefits are productivity gains, recruitment savings, and an improved corporate culture. Significant values include retention and cost avoidance.

Plan Outline / Project Reporting

The project receives the appropriate approvals. Cross-dependencies between T and other staff members are noted, and HR monitors the implementation and progress reports.

 

3. Marketing Perspective

Situation Analysis

The Business Case Situation Analysis identifies a gap in the competitor’s offering. The category is showing continued growth. You currently have a strong brand presence, with excellent margins.

Business Objective / Solution Options

The benefits are increased revenue, market share, and profitability. The optional solutions include adding a line to your existing brand and introducing a new flanker brand. The determination is made to move forward with the line extension and self-manufacture a production line that will function at maximum capacity.

Cost-Benefit Analysis

All product development, advertising, and go-to-market costs are captured. In this analysis,  placement levels and velocity estimates are contrasted. Based on a strong ROI forecast, the new item is greenlit.

Plan Outline / Scope & Dependencies

This outline identifies cross-dependencies with R&D, production, packaging, and the sales department. The brand manager spearheads the project, and monitors all timelines, costs, and regular check-ins.

 

4. Manufacturing Perspective

Situation Analysis

Production realizes that current facilities are inhibiting growth, due to inefficiencies in line speed. Market trends continue to show a strong demand for the company’s products.

Business Objective / Solution Options

By expanding categories, you will have the opportunity for significant increases in volume, revenue, and profits. The options for meeting demand include buying new equipment, the expansion of an existing plant, and building a new facility.

Cost-Benefit Analysis

This analysis compares the associated costs, production capacities, and throughputs for each option, as opposed to projected profit increases.

Recommendation

Armed with justification from the business case, the capital committee authorizes the new production facility and increases capacity.

Plan Reporting

The company delivers more products to its customers, and sales revenues and operating margins improve.  

 

Conclusion

The development of a business case is both a process and a skill. Keeping these components in mind, you can create a compelling case for almost any business initiative. You can practice by developing business cases for smaller issues, so you can gain expertise and hone your creative skills.

The above template and examples are designed to inspire business cases for your projects. Only then will you know the specific informational requirements of your decision-makers. Use this template, adapt the elements as necessary, and make it yours.

Remember that the keys to project success are making deadlines, staying within the budget, and producing the agreed-upon benefits. Focus on the value your benefits deliver to the organization. Ensure that the expended time and resources are warranted by the value creation.

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