A Business Case should be written with sufficient detail in a language easily comprehended by the targeted audience to facilitate decision making. For many organizations, a compelling Business Case is a pre-requisite for committing investment into new projects and products. Business Cases also serve as a compelling argument to induce angel investors to fund ventures.
Structure of a Business Case
The Business Case is a medium through which structured thinking is exhibited. There is no hard and fast rule about what sections need to be a part of a Business Case. There are however important sections that should in most cases be included in the Business Case. These are provided below.
Executive Summary: The Executive Summary is a condensed version of the entire Business Case. This is the first section of the document, but is written last. The executive summary should encapsulate the information from various sections of the document and should succinctly describe the objectives, the approach, solution highlights, benefits, costs, key milestones and the timelines.
Objectives: This section should be used to describe the Problem Statement. For new product ideas or opportunities, this section should describe the opportunity, why it is being considered and how this proposal would change the business. In the situation where business cases that are prepared for the purposes of increased revenue or cost reduction, this section should describe the current situation and the future state after the proposed initiative is undertaken.
Analysis of alternatives or scenarios: This section should include assumptions, researched data and analysis that form the basis for the benefits being projected. While research would provide historical data, projections should include “most likely”, “best case” and “worst case” scenarios. This would provide an allowance for potential variations and clearly conveys the impression of a Business Case that factors in uncertainties.
Evaluation of alternatives: All alternatives generated or considered should be listed here. Criteria for evaluation can include strategy, vision, organizational priorities, opportunities, potential benefits and payback timelines. This section should conclude with the preferred alternative along with the underlying rationale for the choice.
Implementation plan: The Implementation Plan fortifies the selection of the preferred alternative. An exhaustive plan may not be required; however, an idea of how the implementation would proceed should be given to convey the message that this has been thought through.
Benefits and Key Performance Indicators (KPI): Based on the scenario analysis done earlier, the benefits should be quantified here. Each benefit quantified should be linked to some characteristic/feature of the project. This is a crucial factor in deciding upon the acceptance of a business case. Having clearly identified KPIs helps executives determine the validity of a specific benefit.
Appendix: All detailed supporting information that has gone into building the business case should be provided in this section. Detailed calculations, graphs, charts and reference materials should be included here.
In an organization, irrespective of the benefits from new business initiatives, a business case is unlikely to get accepted unless the proposed solution is aligned to strategic goals. Presenting a well-organized business case will provide the impetus for an organizational benefit as well as reflect positively on the employee responsible for the document. For an entrepreneur, a well written Business Case may just secure that sought after funding from angel investors or venture capitalists