The initial action by a project team is writing a business case. This document will continuously be referred during the project execution and closing.
A business case basically validates the commencement of any project. It contains an elucidation of the business opportunity or issues, the expenses involved, advantages of each option, and the suggested remedy. Writing a business case is important and the project team should know how to write a business case using business case examples as a guide. Normally, the initial action in a project is the completion of business case, which is submitted to the sponsor for sanction. The business case is frequently consulted to ensure that the project is on the correct path. The project achievements are compared to the goals described in the business case. Therefore, the business case is vital for the project success. A business case is an essential tool that assists during the project planning and arriving at decisions, such as the determination of market products, viability of projects, and reasons for initiation of projects.
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Reasons for Writing a Business Case
The most significant purpose for the formulation of a business case is the justification of investment for the project. It is the single document that contains all significant information regarding the project, and all facts are associated with each other. It explains the following:
- What are the opportunities in initiating the project?
- How will the endeavor resolve the opportunities being encountered?
- What are the suggested responses?
- How are the opportunities addressed by the solution?
- What is the amount of investment required in terms of essential resources?
Function of a Business Case
The business case continuously serves as a guide for the project team to compare their project achievements with the objectives defined in the business case, and implement remedial measures where necessary. The other business case role is to confirm that the project solution fulfills the business needs, and thus funds may be allocated for the project. The business case authenticates monetary justification for the project, by prioritizing against other initiatives that may be implemented by the sponsor. It reflects the complete project that can be easily visualized by all the stakeholders.
Elements of a Business Case
A business case that has been thoroughly deliberated provides the management a structure to decide if a project may be started. The business case is a template for the project manager and his team, which is used for the tracking of a project during its progression. It is used to confirm the reasons for the project's existence, and the probability of achieving the objectives. A complete business case normally includes the following:
- Background of the project related to the market conditions.
- An analysis of the benefits that may be expected from the business.
- Various options available, including their analysis.
Estimated scope and cost, including the human resources and equipment required
Study of the potential project risks, and their impacts.
- Conduct of gap analysis that involves the examination of risks if project is not undertaken.
Who Writes the Business Case
The people who are involved in writing a business case depends upon the business or company, but the practice may include contribution from vital top management. Project and functional managers can provide useful information regarding the production and manufacturing capability, marketing, and financial affairs. They know well how to write a business case. In small projects, only one person may provide all the relevant information, while in large projects input from the project team may be necessary.
Queensland University Of Technology, What should a Business Case contain, retrieved at http://www.frp.qut.edu.au/services/policy/documents/Business_Case_Guidelines.doc
- University Of South Australia, Business Case Template, www.unisa.edu.au/sas/Documentation/template8buscase.doc