A Project Business Case sets out why you should start your project. It gives an
‘analysis of the benefits and costs of making a change to the way things are done’.
Your Project Business Case is therefore a tool for senior people to make an informed decision. It is a vital part of your project governance.
Here’s a short video that answers the question, What is a Business Case?
A project business case is a part of the overall set of project definition documents; sometimes know as:
This document (for a small project), or suite of documents (for a large project) needs to answer three questions:
So you need a Project Business Case to set out the purpose of and justification for the project. It acts as the basis for the Go/No-go decision to invest or not in your project.
Quite simply: it puts the case.
You therefore need to compile your business case rigorously. So first gather information and data, and compile the costs, benefits, and risks. And then you must use an acceptable methodology for conducting the analysis. And finally, present your conclusions clearly and objectively.
Making a decision, and then justifying it, are clearly the primary purposes of your Project Business Case. But there are many other reasons why your organization should consider them to be a necessary part of Project Management and Governance.
Principally, your business case must answer the questions the decision-makers will (and should) ask. These include:
The secondary governance role of your Project Business Case is to evaluate project success. This will happen at the end of the project, and during it. External assessors, like a Gateway Review team, or Project Auditors, will use your Business Case to consider whether you are delivering the benefits you projected. And also, how well you are keeping to your budget, so the net benefit meets your plans.
When was there ever a ‘typical project’? But on a typical project:
The Project Manager is responsible for compiling the Project Business Case
A Project Board has responsibility for approving (or rejecting) the Project Business Case
Your Project Sponsor is accountable for delivery of the benefits that the business case projects, and controlling the costs within the budget in the business case.
The Project Manager is responsible for maintaining the Project Business Case as a live, controlled document. You will do this in consultation with yor Project Sponsor. This means that, if there are any significant changes, the team will need to update the business case. And if those changes are substantial, it would need to go back to the decision-making group.
Do you have a Gateway Review (or Stage Gate) process? If so, then the Gateway Review Team will use the Project Business Case as part of the basis for their assessment.Get the Great Big Guide to #Project Business Case https://wp.me/p79Sag-EI #PMOT Click To Tweet
The questions we saw in the section above need to dictate the contents of your Project Business Case. So too should its target audience. As well as your decision-makers, this includes:
So, here is the content list from our Project Business Case Template.
Your Executive Summary must cover the key issues and conclusions from your Project Business Case. This is valuable to decision-makers, because they will want a quick overview, to help them understand what they will be reading. Sections are likely to include:
At the heart of your business case is the answer to the question: ‘why do this project?’ So the information you need will include:
Here is your Evaluation of the Pros and Cons of each option. This section gets to the nub of the case for your project. It sets out the value for money that each option represents. You will document:
This section is where you set out the governance process around the approval and maintenance of your Project Business Case. So, you will need:
Other things that you may want to include:
A simple process for building and using a robust Project Business Case consists of six steps.
The purpose of this step is to develop a prioritized list of project requirements:
Now you will take what you have learned and use the Project Business case structure to document it:
Use the options to create a formal evaluation of each one, so your decision-makers will be able to compare them on a like-for-like basis.
You have done the hard work, now pull together your Project Business Case document. Our Project Management Template Kit contains a useful template.
If you do not have a procedure for placing a Project Business Case before decision-makers in your organization, you’ll need to create one. When you get a decision, be sure to document it. I favor a process that not only has decision-makers signing-off your business case, but also has them, and other senior executives who need to contribute to your project, signing a printed copy of the business case that they approved. This is a great way to focus minds on accountability and the role each has in delivering the project benefits.
Once the decision-makers have approved your Project Business Case, it will become a live document. Therefore, you need to:
If you do, we’d love to see your experience or thoughts about this article. Put them in the comments below.
You may be interested in our Project Manager’s Project Definition Kit – an innovative course and resource kit, so you can take a jumble of ideas, needs, and requests and turn it into a well-defined project.
Dr Mike Clayton is one of the most successful and in-demand project management trainers in the UK. He is author of 13 best-selling books, including four about project management. He is also a prolific blogger and contributor to ProjectManager.com and Project, the journal of the Association for Project Management. Between 1990 and 2002, Mike was a successful project manager, leading large project teams and delivering complex projects. In 2016, Mike launched OnlinePMCourses.
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