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business case

Contributor(s): John Glover

A business case is a written or verbal value proposition that is intended to educate a decision maker and convince them to take some kind of action. When written, the document itself is sometimes referred to as a business case.

At its simplest, a business case could be a spoken suggestion. Short-term actions leading to immediate, measurable and substantial benefits are generally the easiest to argue. For example, if a restaurant’s manager notices that the business doesn’t make enough money on Sunday evenings to cover operational costs, presenting that fact to the owner may be compelling enough to make the business case for closing the restaurant at 5 p.m. on Sundays.

For more complex issues, a business case should be presented in a carefully constructed document that provides the reader with information about the risks and rewards involved in taking action and, conversely, not taking action. A well-crafted business case explores all feasible approaches to a given problem so that responsible parties can select which option serves the organization best.

Standard components of a business case include:

 

Executive summary
This high-level view explains, in a condensed form and plain language, the problem that the proposed project is intended to solve, possible solutions, the desired outcome, resources required to achieve the desired outcome and the anticipated return on investment (ROI).

The problem statement
This section clearly identifies what issue needs to be addressed.

Analysis of the situation
This section provides more context, explaining how the problem came about and what the repercussions would be if no action was taken. The conclusion of the analysis should lead naturally to the next section.

Options
In this section, the writer identifies potential solutions to the problem and provides sufficient detail for the reader to understand them.

Cost-benefit analysis
This section evaluates the costs and benefits for each potential option, including the proposed solution to the problem and any likely alternatives -- which include, of course, taking no action at all.

Recommendation
In this section, the writer makes a recommendation for how to address the issue described in the problem statement.

Project proposal

This section provide the reader with details about how the recommended solution will be carried out.  It includes information about the project's scope as well as possible constraints and estimates for required resources, including personnel, time and budget.

This was last updated in November 2017

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