How to Write a Business Case: A Step-by-Step Guide

You may want to write a persuasive business case to present a new project to your company or to secure resources for your own start-up. Regardless of the reason, crafting a strong business case is essential for bringing your ideas to life. In this guide, we will provide you with tips and strategies to help you create a convincing business case.

The business case is created before the start of a project and is a document that will function as the basis for the creation of the project charter. It will also allow you to make the decision on whether a project is done or not. Keep on and we will show you how to write your business case step-by-step.

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Summary

• To build a persuasive business case you need to conduct a situation statement to identify opportunities/problems.
• Demonstrating that you have evaluated several alternatives, considering the feasibility of each and based on data, will increase the credibility of your analysis and, therefore, your chances of success.
• Input from stakeholders, documentation, and the company’s situation are crucial to an accurate analysis of the situation.

4 steps to create a business case

There is no standard for making a business case and its structure may vary from company to company. For this guide, we have brought you the following structure that for us is the most logical and following it will ensure you achieve an excellent business case (2).

1. Identify the problem or opportunity

As obvious as it may seem that your idea is the solution, the problem or opportunity must be addressed objectively. It is recommended that you avoid focusing on the solution and instead focus on understanding the situation and analyzing the information discovered.

As the person in charge of this analysis, you should ask yourself: What problem are we solving, or What problems do our customers have that this opportunity solves?

Activities to perform

1. Identify the stakeholders: Start by identifying which stakeholders could be affected by the decision, activity, or outcome of your project.
2. Research the problem or opportunity: The objective is to understand the situation to give context to the problem or opportunity. We suggest interviewing stakeholders (3) and studying existing documentation.
3. Data collection and situation assessment: It is important to measure data relevant to the situation. Once the data is collected, techniques such as Pareto analysis or trend analysis are used. The important thing here is that data-driven decision-making (DDDM) will be achieved in the future.
4. Create the situation statement: Creating it is crucial to ensure a solid understanding of the problem or opportunity (4). If the situation statement is unknown, there is a risk that the wrong solution will be identified.
5. Obtain stakeholder approval: This is fundamental, as the situation statement guides subsequent work to assess the business need and needs to be refined with stakeholders.

2. Assess the current state of your organization

Once stakeholders agree on the problem that needs to be solved or the opportunity that the organization wants to take advantage of, proceed to analyze the situation in detail.

The objective of this assessment is to understand the organization’s goals and objectives, the root causes of the problems that prevent achieving them, and the contributors to any opportunities that help achieve them. Some of the activities you can perform are:

Assess organizational goals and objectives

Studying your organization’s business strategy documents will allow you to gain an understanding of the industry, markets, competition, and other factors. These documents will give you more context.

Success criteria

Many times your company’s goals and objectives will be measurable through criteria, take them into consideration.

Do a root cause analysis

It is time to analyze the situation further. Break down the situation to determine the roots of the problem or opportunity contributions, techniques such as ‘the 5 whys’ or cause and effect diagrams are used here.

Determine the resources required to address the situation

Based on the findings of the root cause analysis, you must determine what resources you need to correct the problem and take advantage of the opportunity (software, machinery, qualified staff, etc.).

Assess your organization’s current resources

Determine what resources your organization already has, as you may not need new resources. Common methods used are process flows, enterprise architectures, and resource frameworks.

Identify gaps in organizational resources

Diagnose your organization’s resource gaps. Take into account the current situation and the desired situation of your company, this can be done through a gap analysis.

3. Recommend action to address business needs

The time has come to provide your recommendation. This phase provides significant value to the organization because it ensures that the wrong solution is not implemented.

A good recommendation takes into account the following: a high-level strategy for adding resources, alternative strategies to consider, feasibility analysis for each alternative, and an order of preference for the alternatives.

Activities to be undertaken

1. Includes a high-level strategy for adding resources: A high-level strategy for adding the resources needed is suggested (without the level of detail of a project charter or project plan).
2. Provide alternative options to satisfy the business need: Rarely is there only one potential solution to a business problem. You should add the most viable options to your recommendation.
3. Identify constraints, assumptions, and risks for each option: This is very useful when analyzing project proposals to address the business need and future drive project planning.
4. Assess the feasibility and organizational impact of each option: It is time to perform the feasibility analysis of each potential option. In this analysis the following variables are evaluated: operational, technological, cost-effective, and time feasibility (5).
5. Recommend the most viable option: When faced with two or more viable options, you should rank them based on how well each meets the business’s needs. A popular technique for ranking the options is the ranking matrix.
6. Perform a cost-benefit analysis for the recommended option: Finally, you should perform a cost-benefit analysis. This analysis should be much more detailed than the one performed when assessing feasibility (6) because if the project is accepted it will be used in the initiation phase.

4. Build your business case

The long-awaited moment has arrived, now you simply have to put the pieces of the puzzle together and build your business case. Actually, if you have reached this point, you have already done the hard part, now you just have to put your findings into a document.

As mentioned earlier, there is no standard for what a business case should look like; its structure will vary depending on your company. However, at a minimum a business case should contain the following components:

Problem/Opportunity

1. Use a situation statement to determine what is driving the need for action.
2. Include data that supports the need to assess the situation and identify which stakeholders are being affected.

Situation analysis

1. It is smart to begin this section by listing the organization’s goals to assess whether the solution contributes to achieving them.
2. Introduce the root causes of the problem or contributors to the opportunity.
3. Support the analysis with data to confirm the reasoning.
4. Include needed versus existing capabilities.
5. Finally, create project objectives based on existing gaps.

Recommendation

1. Present the results of the feasibility analysis for each potential option.
2. Specify any constraints, assumptions, risks, and dependencies for each option.
3. Rank the alternatives and recommend one.
4. Include why it is recommended and why the others are not.
5. Summarize the cost/benefit analysis for the recommended option.
6. Include the implementation strategy along with milestones, dependencies, roles, and responsibilities.

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Evaluation

1. Includes a plan for measuring the benefits achieved.
2. Includes metrics on how the solution contributes to goals and objectives.

Conclusion

Making a business case is not an easy task, but it is a beneficial document for your company that will allow you to make a more objective decision about the fate of your project. It is important to consider the stakeholders, and the company’s situation and to make a thorough analysis to reach an accurate conclusion.

To make sure you create a persuasive business case, you should at least follow the following steps: identify the problem or opportunity, evaluate your organization’s situation, recommend the most feasible action, and evaluate through metrics the benefit produced for your organization.

References

1. Project Management Body of Knowledge (PMBOK® Guide) 7th edition. -. Project Management Institute; 2021.
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2. Business Analysis for Practitioners. -. Project Management Institute; 2017.
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3. Wheeler D, Sillanpa M. Including the stakeholders: The business case [Internet]. -. Elsevier; 1998 [cited 2022].
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4. Johnston W, Leach M, Liu A. Theory Testing Using Case Studies in Business-to-Business Research [Internet]. -. Elsevier; 1999 [cited 2022].
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5. Carroll A, Shabana K. The Business Case for Corporate Social Responsibility: A Review of Concepts, Research and Practice [Internet]. -. Blackwell Publishing; 2010 [cited 2022].
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6. Leatherman S, Berwick D, Nolan T, Davidoff F, Lewin L, Iles D. The Business Case For Quality: Case Studies And An Analysis [Internet]. -. Health Affairs; 2003 [cited 2022].
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