Preparing a Business Case
Recognising a Need
This article provides some background information and general guidelines on the
preparation of a business case.The word 'problem' is used synonymously with 'opportunity' in this page.
Typically, the drivers for projects stem from some general malaise or prospect.
Often this is quite vague. Symptoms of problems can be experienced in the following
ways:
- Falling sales
- Escalating costs
- Low productivity
- Low profitability
- Low customer/staff/board satisfaction
- Falling share price
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Similarly, opportunities are things like:
- Increase market share
- Increase profit
- Maintain competitiveness
- Improve morale
The first task in relation to a symptom is to measure its severity. This is a matter
of assessing various costs; financial costs, opportunity costs, hidden costs (after
they have been found) and human costs. If it's significant, proceed.
The second task is to root out the underlying problem. Falling sales isn't the problem,
it's the symptom. The 'real' problem might be product defect, market decline, inadequate
marketing, or a mish-mash of all these.
Once you've got to the heart of the problem, the next step is to decide whether
it's worth fixing. At this stage all that is required is a general agreement that
the matter is worth following up. What will happen if you don't do anything? What
is the likely impact if you do?
Armed with a correctly identified problem that is worthwhile, you can move to preparing
a business case.
The Business Case
Identifying and Assessing the Alternatives
The challenge now is to weigh up the alternative solutions and get business buy-in.
You need to identify the constraints and objectives of all serious alternatives.
Constraints are the things that stand between you and implementation of that particular
solution, including budget, technology, environment, people and skills.
Objectives are the things that you expect the solution to give you. What are the
basic criteria for considering a project? Can we measure our success? Are we trying
to improve gain or reduce pain?
Eliminate projects with too many constraints or too little impact.
Prepare a broad outline of the obvious risks and scope of the remaining alternatives,
including preliminary costings and timeframes. The projects that survive this step
are the ones that you want to get up.
Recommending a Solution
In terms of getting business buy-in this is the most important step. It is your chance
to present your vision of what the world will be like after successfully implementing
the selected project(s).
Your recommendation should be in the form of a Vision and Scope document, and include:
- Concise statement of business requirements
- Project description and goal
- High level scope (major features)
- High level cost/benefit analysis
- High level risks
- High level assumptions
- Exclusions
When you get business buy-in, then the real fun starts…
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