Need to solve a problem? Want to take advantage of a new opportunity? Start by building a business case.
What is a business case?
You may feel pressure to propose a quick solution in order to seize an opportunity or to solve a problem. But recommending an action without considering a range of alternatives is risky—and likely to be rejected by decision makers.
Instead, prepare a business case in which you compare multiple alternatives and propose a single course of action that creates the most value.
Your goal when creating a business case is to help people decide whether to invest resources.
If you’re making a case for a project or initiative within your organisation, you already will have access to some of what you need to present a winning case: information about your organisation’s strategic priorities.
When to create a business case
The process of building a business case is similar to solving any problem. Developing a business case helps you identify potential solutions and sell the best solution to decision makers.
A business case is useful when you want to:
- Demonstrate the organisational or community benefit of a proposed solution
- Prioritise projectsand identify which ones to eliminate
- Obtain additional resourcesfor a new project or initiative.
Create and Deliver a Strong Business Case
A business case is a call for action.
Start first with facts. Your case for investment is only as strong as your understanding of both the status quo or business as usual and the future potential. You need research to help other stakeholders see the opportunity.
The second is outcome. Having confidence in the potential outcome suggested by the facts, as well as a firm belief that an investment will deliver the benefits is key to success – preferably supported by other recent examples.
It is important to remember that change is not easy for people, or for organisations. Even if the facts point us in a new direction, business as usual can seem like a safer bet. Quite simply, it takes determination to pursue an unfamiliar path.
And that’s what makes the right business case so important. When you provide stakeholders with a fact-driven vision of the future and demonstrate potential results and determination in achieving it, you can change their response from, “It’s too risky to try” to “It’s too risky not to try.”
Be clear on the required processes
Before you create a business case, be very clear on the required processes to see how your organisation and funders review and approve initiatives.
- Is there a formal process for evaluating business cases? Does a funding agency also have particular requirements?
- Who has the authority to approve a business case? This may depend on the scale and complexity (and risk profile of the project)
- What level of detail will stakeholders and decision makers want?
Identify decision makers
The decision maker usually an individual, or in some cases a committee, will decide whether or not your initiative gets approved. Find out who will be evaluating your idea. Then identify:
- What they stand to gain—or lose—from the opportunity – how does it align with priorities?
- What influences them most
- Similar initiatives supported in the past
- How they like to receive information
- How they tend to make decisions
Knowing how decision makers act and what they care about will help you tailor your business case to the right audience.
The development process for infrastructure investment proposal
Once you’ve learned how business cases are approved in your organisation and what decision makers value, there are six recommended steps to build your case:
- Define the Opportunity. Describe the situation, the challenges and the objectives your proposal will impact.
- Explore Options. Brainstorm multiple approaches and choose three or four to analyse.
- Analyse Alternatives. Examine how the options will contribute to the objectives and choose one to move forward with.
- Assess Risks. Evaluate how you will mitigate risks associated with your recommended solution.
- Create Delivery Plan. Identify, at a high level, how you will deliver the project and who will be accountable for each milestone.
- Present Your Case. Craft a document, a presentation, or both, to sell your recommendation to decision makers.
To build a compelling business case, you need to complete each step. However, the depth of analysis and extent of documentation necessary to support your case will vary depending on the initiative’s scope, cost, organisational impact, and risk.
Making Your Ideas Credible
How does the decision maker decide whether s/he should go ahead or not unless the proposal is backed up with a good business case? And that is why backing up your idea with a good, sound business case is the most important thing if you want to take your project ahead.
Let give you a few more tips about building up a business case.
First, be sure of your facts. Cross-check them, talk to people, make sure that whatever facts you are mentioning in your business case are verifiable and correct.
Next, make sure that your assumptions are realistic and credible. We have this tendency to put in assumptions that will never be met and that would take the whole business case down when you are defending that case in front of the management.
The third critical thing is to really be clear about your business case. Prepare it well. It will go a long way in taking your project further.
And last but not the least, communicate well—be able to stand up in front of a committee and clearly articulate your idea and your business case so that people can understand well what you are trying to achieve. It gives so much more credibility to your case.
- A business case is a call to action – from problem or opportunity to a solution
- Clearly outline the facts and expected outcome
- Be clear on the required processes to gain approval
- Find out who will be reviewing your proposal and what they see as important
- Follow the six step development process to build your case
- Be prepared to ‘sell’ your recommended solution to decision makers
What is your biggest challenge in building a business case?