A business case seeks to provide the rationale and evidence supporting a proposed investment. Current fiscal pressures and increased scrutiny over company resource allocations is driving the increased demand for high quality business cases.

A well-written business case outlines the objectives, evaluation of alternatives, benefits, costs, risks, and demonstrates how it helps achieve the strategic goals of the organisation. It’s a critical tool in assisting organisational decisions to assess the feasibility, rationale and potential value in progressing with a potential investment.

Poorly structured business case may lack sufficient detail, use unrealistic assumptions, or omit important information. These flaws can lead to incorrect decisions, wasted resources, missed opportunities, or failed projects.

Leading Practice Business Cases

A well-developed business case seeks to be clear, comprehensive, and compelling to increase the likelihood of successful outcomes. It should include the following components:

• Alignment with strategy. The business case provides an understanding of why the investment is required. It should align with the strategic goals and priorities of the organisation with a clear demonstration of how the proposed investment contributes to achieving them. This should include defining the problem that the proposal aims to address and explaining its causes, effects, and urgency.
• Transparent and objective evaluation criteria. The business case should be free from any potential cognitive bias and provide reliable information to support a decision on whether to proceed. This will include the establishment of consistent criteria with a clearly identified preferred option and its justification, including consideration for the ‘do nothing’ or ‘status quo’ options. This criteria includes benefits, costs, risks, and other criteria relevant to the organisations operating environment.
• Broad and effective stakeholder engagement. The business case should involve the relevant stakeholders throughout the development process, and seek their input, feedback, and endorsement. This involvement ensures that all relevant information can be collected and distilled into a clear case for change. Stakeholder engagement during evaluation of options will ensure all aspects of scope and potential risk have been identified and appropriately reflected in the evaluation.
• Evidence-based options evaluation. The business case should use evidence from credible sources, such as organisation data, research, benchmarks, or leading practice to support the claims and assumptions. This evidence is used to substantiate the value proposition of each identified option, highlighting the benefits, costs, and risks for the stakeholders.
• A pragmatic approach to effort and governance. The effort and level of detail sought within a business case will vary, depending on the size, complexity, and risk of the proposed investment. For instance, a large-scale investment for proven construction methods may require less rigour than a smaller information technology investment with greater brand and employee impact risk. Governance channels also provide a mechanism for the business case to be reviewed and refreshed regularly, incorporating any changes in the internal and external environment that may impacts its viability.
• Clear written structure. A well written case should follow a logical structure, with a clear introduction of the problem it seeks to solve, a main body covering the scope, context, options and associated evaluation. The case needs to provide clear recommendation on the preferred pathway to procced, including the rationale for its selection.

Business cases are essential documents that explain the rationale and evidence for a proposed investment or change. Understanding the why behind every investment assists organisations understanding which investments will deliver on their strategic objectives.