- Demonstrate the value of a proposed product or service would generate for your organization;
- Obtain board approval for the investment;
- Decide whether to outsource a particular function;
- Relocate business operations and manufacturing facilities;
- Prioritize projects within your organization that are competing for funding and resources;
- Secure financial funding and resources to implement the project.
Steps To Building A Business Case
Steps to building a business case. All change involves a creative tension between the current and future states. The existing business case for change should be expanded at this point, with the leadership extending the case down to the local level. A common error at this point is to build a business case for change at the macro level, create the vision for the future, and then move to deploy based on the future state only.
Instead, to fully engage change; every member of the organization must evaluate the changes based on his or her own perception of the benefit of that change relative to his or her experience of the current state. The leadership network members will likely be ahead of the thinking of the rest of the organization and will thus have less support to engage the future state at this point. This increases the need for them to become thoroughly grounded in both the vision and in the current state.
A business case typically outlines the financial requirements and incentives for the project. Your case for change and desired outcomes will engage employees and convey to your stakeholders why they should invest in the effort required by the change.
Preparing the business case enables you to take a disciplined approach to critically examine the opportunity, the alternatives, the project stages and the financial investment in order to make a recommendation for the best course of action to create the business value.
When the time is taken to develop a solid business case, the investment proposal is much more informed. In turn, this will increase the benefits and value of the project and reduces the risks. There is also a much greater likelihood of securing support to proceed with the investment.
A business case is required when you need to:
By well-documenting the business case, you be able to proficiently present the recommendation to stakeholders whose support is required for approval. The documented business case will provide confidence and a level of certainty that the considered proposal will be successful.
Steps to building business case:
Step 1: Confirm the opportunity
Describe the situation and the business opportunity that your proposal will impact. This will include the background to project, the investment logic and the high-level business requirements.
Step 2: Analyse and develop shortlisted options
Identify the alternative approaches and select three or four options to analyze. Gather information about each alternative, analyze the options and develop the shortlisted options.
Step 3: Evaluate the options
Evaluate how the alternatives will deliver on the business objectives, then select the preferred option, taking into account the strategic and financial value created and the risks.
Step 4: Implementation strategy
Create the implementation plan for the preferred option, detailing how to achieve the business objectives, who will be accountable for each milestone, and how to mitigate the project risks.
Step 5: Recommendation
Confirm the recommended option. Create the business case documents and present the business case recommendation to the board and management team for approval to proceed.
It is important to complete all of these steps to form a solid business case.