What is a business case?

What is a business case?

A business case is a document or collection of documents that is used to repeatedly check the business justification in the ongoing project. In day-to-day project work, the business case is maintained by the project manager and, if necessary, updated if content has changed. This is to prevent pointless projects from being started or continued.

The most important contents

For the content of a business case, I followed the PRINCE2 project management method very closely, because PRINCE2 provides clear structures. The following elements can be found in the business case:

Rationale: Under this item, the reasons and strategic goals of the project are presented. In this way, all those involved can keep in mind at the beginning and during the course of the project why the project was started. Also important: Create "alignment" among all project participants.

Costs: The total project costs are listed here, including ongoing operating and maintenance costs. In practice, the project plan is often accessed to obtain information about individual product costs.

Expected benefit: As the name implies, in this step we try to document the expected end benefit - the result we want to achieve with our developed product, for example. It is important here that the benefit is measurable. There should also be a comparison between the situation at the beginning of the project and the desired one at the end. In summary, we need to be able to check at certain points in time whether we still expect the same benefit or whether it has changed - and whether the project was a success or not at the end.

Time: When does the project start and when should it end? This is exactly where these questions are clarified. In this way, a project can be better divided into management phases.

Main risks: Every project brings uncertainties. For this reason, those involved in the project draw up a list of all the risks they have identified at the beginning of the project. For this purpose, they document possible effects and plans that take effect if a risk actually occurs.

Expected negative side effects: This is an event that, according to previous analyses, will occur and negatively affect at least one stakeholder. Many people find it difficult to distinguish between risks and expected negative side effects. Risks are events whose occurrence is uncertain. Negative side effects are actual consequences that must be evaluated and may even have an impact on benefits.

Conclusion

The necessity of a business case cannot be denied. It is important to clearly identify from the outset what content should be included in this document and in what form, and who in the project management team is responsible for maintaining it. Clear structures are important. Because only when we regularly review the business case can we repeatedly clarify over the entire duration whether the project still makes sense or not.

Take the time and watch the matching technical videos on our SERVIEW YouTube channel. You will also find the business case as one of the most important elements in our PRINCE2 training. If you have any further questions on this topic, please do not hesitate to contact us. We will help you to set up the appropriate business case.