Business cases are documents that argue for a specific action, and provide substantiations, rationales, justifications, and other support in order to compel the sponsor into taking a desired action.
Business cases are mostly drafted for commercial purposes where you have an amount getting invested, and the business goes into justifying the investment and coming up with the return on investment. For example, if you are going to invest X amount of money into a project, sub project, or a new business, how much time will it take for you to recover the money and what is the rate of profit you would start seeing thereafter?
In IT, we write business cases all the time, depending on the domain you are in. Some commercial business cases include setting up a monitoring system for automatic detection and notification, procuring faster laptops, and setting up applications for generating reports. In each of these cases, you can potentially show how investing a certain amount of money can lead to benefits which reduce the human effort, reduces errors, and increases productivity.
You can write noncommercial business cases as well. It simply means that there is no money invested into a decision, but rather a change in the way we work. You could be writing a business for reorganizing teams—thereby providing the positive effects it can have on the team, delivery, morale, and logistical optimization, among others. Basically, as I mentioned earlier, you will have a problem statement which the business case attends to, provides a solution, justifies the solution, tallies cost against benefits, and argues with the sponsor for going in with the decision.
So, a commercial business case involves investing money, and the end results generally expect to see a return on investment like a company investing X dollars and expecting to see 2X or 3X within a certain period of time. Or the expected end result could be customer perception/satisfaction or complying with a legal obligation. In a noncommercial business case, the changes specified in the business case do not involve money. That said, the changes are not superficial either. The changes that are being justified involve noncommercial elements that make up an organization and its services.
A business case is a document where you put in a compelling case for a decision to be taken in your favor. So, in this document, you can add whatever you need to convince the reader of the benefits and the actions to be taken. But, there are certain generic elements that are accepted to be pretty standard in a business case, and I will present them to you in brief.
Before you start to put pen on paper, you need to ensure that you have the key items for all the sections that I mention next. You need to have done the research and have the substantiating information to complete the elements of a business case.
What are you trying to solve through this business case? The decision you are aiming for must be targeted towards something—like nonproductivity through slow laptops, disintegrating the team due to a weak matrix organization, or lack of Internet bandwidth to carry out daily operations. In short, you need to know what you are going to attack. This is along the same lines of what I have been discussing all along in this book: know the objective you are trying to achieve.
In the problem statement, you don't go into details. You just state a high-level problem—like what you see from 40,000 feet. In the problem analysis section, you get into specifics. You go into minute details of what you think is the problem and what are the ill effects of living with the problem. You can go into as many items as you want; the sponsor might choose to read it or skip it, but the information has to be there if he or she chooses the former.
Before you come up with a solution, you would have assumed certain things like the rate of inflation in the next five years, future customer requirements, and so on. Put down all the assumptions you have made so there is a transparency you are creating for the reader to see and believe what they are reading. At the end of the day, if you are going to say that the business will grow by 20% year on year, the substantiation must justify your numbers, and numbers are generally an outcome of market situations, changes in technology, and customer focus, among others. Remember that your justifications must not sound like a car salesman plucking random numbers from the air and making a mountain out of a mouse.
The solution to the problem on hand must be down as clear as day. If you can provide multiple solution options, it provides a wider array of decisions to make. When you provide a solution, you can explain how it works using visuals, support theories using graphs, and come up with whatever form of written communication that you need to subscribe to in order to make your point.
This is the section that talks about the moolah. Simply put, you would estimate the cost of the solution and list down the benefits you are getting out of the solution. Later you would map the cost against the benefits to prove that the benefits exceed the cost of the solution. In business language, we call it return on investment (ROI) and value on investment (VOI).
In most cases, you would have come up with multiple solution options. So, in recommendations, you can write what you feel that the sponsor must opt for. You are giving your two cents, against the solutions handpicked by you.
I recommend that we purchase an off the shelf portal software and customize it for our needs. My research has come up with XYZ software and our team has the skills to customize it.
You will also recommend how you want the project to be scheduled, the people who are needed to be involved, and the disbursement of funds. You can reiterate the problem, solution, and the cost-benefit analysis yet again to bring in clarity to the concluding section of the business case.
Here is the table of contents for a typical business case. Feel free to add additional fields. Remember that the objective is to convince the sponsor to sway in your direction.
The executive summary is a high-level view of what the business case contains. You will introduce the problem statement, speak on the cost-benefit analysis, and discuss the recommendations in plain business language. In this section, you will stay away from all technical lingo.
Comparison with competition is self-explanatory. To put up a compelling argument, it helps in knowing what the competition does, and when the competition employ a certain solution, it is proof that it will work, and the sponsors would be all the more likely to give it a nod.
You can put in a detailed list of project activities along with the timelines that the activities will take. You can also put down the cost of every activity, the risks and challenges involved, and just about all the project information that you feel the need to share. The more the better as long as it is accurate.
You can find a sample IT business case in this section. You will observe that it is a lot smaller than the business proposal. Generally, that is how it is in the real IT world.
Action Point
Exercise (for students to attempt at the end of this topic followed by a group discussion):
Identify an improvement opportunity in your project/team/organization and prepare a business case based on the input provided in this chapter. Obtain feedback from your manager about whether the case you have put up is compelling enough for action to be taken.