In business, resources are finite, and opportunities come at a cost. In pursuing profit and growth, organisations continually ask themselves several questions: What projects should we invest in? What products or services should we offer? How do we best utilise resources? The answers are not simple, and they need to be supported by research, facts, and figures. To facilitate decision-making, research, facts, and data that support certain decisions are presented as a business case.
Business cases are critical pieces of project documentation that outline a business problem and provide options to solve it. The aim of a business case is to convince decision-makers that a particular course of action will result in the best outcome for an organisation.
Business cases need to be created daily within organizations. They have consequences for the individual presenting it, the department and the business at large. As such, it’s critical to understand how to create and present them effectively. Here, you will discover the different types of business cases, how to write a business case and how to present one. You will also find an example of a business case and resources to help you create your own.
Business case basics
Business cases have characteristics that are similar to other types of organisational documentation. Below is information on what business cases are (and what they are not) and the different types of business cases you can produce.
What is a business case?
Every day, hundreds of different projects take place within organisations around the world. Of these projects, many are business-as-usual (BAU). BAU projects are projects the business carries out as part of their everyday activities. Outside of these, there are also special projects that don’t form part of an organisation’s everyday activities but are still critical. These projects may require a business case to be created.
A business case will help decision-makers understand why a special project needs to be completed and how they should do so.
Why create a business case?
Business cases perform two important functions. Firstly, they help organisations understand project options and what each will cost in terms of time, money and opportunities lost or gained.
Secondly, they show decision-makers that there is rigour behind certain courses of action. For example, a business case might show that two IT systems have been analysed but that a certain provider will fit the business’s requirements better. Business cases show that decisions are based on research and facts, as opposed to one person’s opinion. They can help businesses justify their spending, as well as help to protect project leads if something goes wrong.
How is a business case different from a business plan?
Business cases and business plans both help to convince key decision-makers to proceed with a certain course of action. Yet, there are critical differences between a business case and a business plan:
|Business case||Business plan|
|What for?||Business cases help decision-makers choose between project options. They are used for strategy prioritisation and internal budget approval.||Business plans layout entire plans for new businesses, major changes to existing businesses or broad plans for a company’s future.|
|Who for?||Business cases are presented to the relevant internal stakeholders, including someone who can give budget approval.||Business plans are presented to investors, shareholders or the senior leadership team within businesses.|
|Focus?||Business cases have a narrower focus, including a presentation of the problem, options, finances, risks and benefits.||Business plans have a broader focus, including competitor analysis, a marketing plan and a business model presentation.|
How is a business case different from a project plan?
Business cases and project plans both present details of certain projects. Yet, there are important differences:
|Business case||Project plan|
|What for?||Business cases come before project plans. They present high-level options of what the project might look like and make recommendations on how the business should proceed.||Project plans begin after a business case has been finalised. They present the practical ins and outs of the project, including how it will proceed and according to what timeline.|
|Who for?||Business cases are presented to the relevant internal stakeholders, including someone who can give budget approval.||Project plans are presented to project managers and any other stakeholders involved in the project’s delivery.|
|Focus?||Business cases have a broader focus: what the project might look like.||Project plans have a narrower focus: exactly how the project will proceed.|
What are the different types of business cases?
For any business case, there are numerous stakeholders who want to have their say. These stakeholders come from different departments within a business and have different interests in the project. For example, a representative from the finance team might be most interested in whether the business can afford the project, whereas someone from the management team might be more interested in whether his or her team can deliver the project.
Catering to the differing and sometimes conflicting interests that various stakeholders can have requires a sound business case structure. One model that provides this structure is the Five Cases Model, which stipulates that a business case must be presented from five different perspectives: strategic, economic, commercial, financial and management.
How is a business case different from a project plan?
Business cases and project plans both present details of certain projects. Yet, there are important differences:
1. The Strategic Case
The aim of the strategic case is to make a case for change and show how it strategically aligns with the direction of the business. To do this, you align your project’s goals and objectives with those of the business.
To present the strongest possible strategic case, outline the business problem to be solved, detail the scope of what you are trying to achieve, and describe the benefits and risks. Explain how a particular process, if successful, would contribute positively to the business overall.
2. The Economic Case
The aim of the economic case is to identify which of the options you are presenting provides the best value to the business, including broader considerations, such as social and environmental effects. This is important if you are presenting a case for a project that the public will interact with, such as developing a product or building a structure.
To present the best possible economic case, show that you’ve appraised multiple options (i.e. created a long list), ruled out options based on cost and value (i.e. created a shortlist), and then explored, in detail, what each remaining option provides.
3. The Commercial Case
The commercial case is the next logical step after the economic case. When looking at a project from this perspective, show that you can procure suppliers (or internal resources) and that you can do so fairly and cost-effectively. =
To present the best commercial case, anticipate the resources you need and then factor in any contingencies that might occur within the delivery of the project.
4. The Financial Case
When thinking from a financial case perspective, show that the business can afford to fund the preferred option you are presenting.
To do so, demonstrate that you have analysed the capital, revenue and whole-of-life costs of your preferred option. Do so in a structured manner, such as by using a profit and loss analysis or other financial ratio analysis.
5. The Management Case
Lastly, the management case needs to show managerial stakeholders that adequate plans are in place for the delivery, monitoring and evaluation of your preferred option.
To do this, present a plan for how your preferred option will be project managed in accordance with best practices, and also show that independent assurance is available if required. For example, consider contract management and how to ensure benefits are realised and human resources are used fairly and appropriately.
When considering how to write your business case, the Five Cases Model is useful, as it considers the perspectives of different stakeholders. Using the Five Cases Model will ensure you present a balanced business case and support agreement on your preferred option more quickly.
How to write a business case
Business cases are critical documents within organisations and can steer strategic decision-making. As such, it’s important to understand how to write a business case in a structured, professional manner. Here is a list of what should be included in a business case, followed by a detailed description of each.
- Executive summary
- Background information
- Project definition
- Business Requirements
- Option presentation and evaluation
- Presentation of preferred option
- Strategic alignment
- Project implementation plan
- Financial Analysis
- Resources required
1. Executive summary
Business cases can become hundred-plus-page documents, so it’s important to begin with an executive summary. The executive summary should include a brief description of the business problem, options presented and the preferred option.
2. Background information
Many people will have a stake in your business case, and many may have little or no context for the project. As such, you need to provide background information on the project. Background information might include why the project needs to take place, similar projects that have taken place, and what has happened in the lead up to preparing the business case.
3. Project definition
In this section, outline all of the critical details of your project. Describe your project and include details on the business problem that it will solve.
4. Business requirements
For any given project, there will be a number of business requirements. For example, did the business have preferred suppliers to work with? Did they have a budget? Did they need a return to be realised within a certain amount of time? Specify these requirements and how your project will meet them.
5. Option presentation and evaluation
The purpose of this section is to show stakeholders that you have researched different options and selected the best one for your business.
Some business cases may require that you conduct research, present a long list of options and then create a shorter list (and a final selection) based on certain criteria. For other business cases, all you will need to do is write a short description of options. What is appropriate will depend on the scale of the project.
Regardless of how you present options, show that you have evaluated them based on the criteria you have been provided. For example, you might look at the price for software, or you might consider price and features. Whatever criteria you are using, make sure you apply it equally to all options to show that you have reached a rational conclusion.
6. Presentation of preferred option
Present your preferred option. Detail why you have selected it and why it best meets the evaluation criteria. Show how it meets business requirements.
7. Strategic alignment
For projects within smaller organisations, it might be obvious how the project aligns with the strategic objectives of a business. For example, a business case for an EFTPOS machine within a restaurant allows customers to pay for their food, so it has a direct correlation with the business’s cash flow. However, for larger organisations, the alignment between a particular project and the company’s objectives may not be so clear.
The strategic alignment section is your chance to demonstrate how your project actively contributes to your company’s broader business and strategy plans.
The benefits section is crucial in a business case. Outline the clear benefits of your chosen option.
The benefits you outline should be two-fold. Firstly, they should discuss why the project should proceed in general. Secondly, they should outline the benefits of what you are recommending, so as to convince stakeholders it is the right option going forward.
Often, people are concerned that if they present the risks of a project in too much detail, decision-markers won’t decide to move forward with a project. This isn’t true. All projects involve risks, and as part of the due diligence in writing your business case, you need to present them honestly and fairly.
In this section, present the risks, including the likelihood that these risks might eventuate.
10. Project implementation plan
To approve a project, stakeholders want a clear vision of how the project will be implemented. Detail this plan here.
Give stakeholders a brief insight into how the project will proceed, which stakeholders need to be involved, what resources are required and a timeline.
11. Financial analysis
The financial analysis section of your business plan is critical in demonstrating that the project is affordable to the business, that they can fund it, and that it will deliver financial value in the short and long term.
Depending on the scale of your project, a simple analysis may be required, or conversely, you may need to go into detail and present forecasts and other financial reports.
12. Resources required
In this section, include all resources, including physical assets, intellectual resources, human resources and financial resources that your project will need.
The authorisations section details who needs to sign off on what and at what stage.
The appendices house important information that doesn’t belong in the body of your business case, such as more detailed research on the options you’ve presented, further analysis of risks and benefits, or more in-depth financial models or project plans.
Business cases are important business documents and require a detailed structure to ensure they function as they should. Including the sections detailed above will give you the best chance of creating a successful business case.
How to present a business case
Learning how to write a business case is only the first step. The next critical step is presenting it to stakeholders.
Six Tips for Presenting Your Business Case Successfully
Follow the steps below to successfully present a business case:
1. Find the right delivery mode
Finding the right delivery mode will ensure that your business case is well received by decision-makers. Think about how your decision-makers like to be engaged. Would it make sense to send them the business case file first and then present the highlights to them? Or do you want them to view your presentation with no prior knowledge of your business case? Here, consider what presentation medium you use. For example, would a short video introduction work best? Alternatively, will you use PowerPoint? If you use PowerPoint, how can you do so in a way that’s convincing while providing the right amount of detail? Do you need to practice your presentation before you deliver it? Ensuring that you have all of these elements right is the first step in presenting your business case.
2. Prepare an elevator pitch
Senior stakeholders are time-poor, so it’s critical to have a short, sharp elevator pitch that summarises your business case. This is important, as not everyone has time to read the business case. Ensure you have the basics covered with your elevator pitch so stakeholders can make an informed decision.
3. Create a hook
Your business case will contain many critical facts and figures. To engage your stakeholders, you will need to translate them into an emotional story. The story you create around your business case will differ from your elevator pitch. It will include how the project will benefit people. For example, you might talk about how much easier life will be for employees with a new type of software or all the happy families who will enjoy an apartment block. Creating a connection through emotion will help you make an impact and be memorable when presenting your business case.
4. Begin with the business need
Every business case should address a business problem. To get stakeholder buy-in for your business case, start by reminding them of what this problem is so they will have greater incentive to hear about your solution.
5. Make it interactive
Interactive presentations are more engaging and memorable. As such, view and deliver your business case as a discussion. To do this, regularly ask questions to specific stakeholders, and ensure you proactively answer any questions asked to you. Also, if you make your presentation interactive, you won’t have to rely as much on your slides, which will make you appear more confident.
5. Follow up
Following up after your business case presentation is important, as not everyone may have had time to ask questions or felt comfortable doing so. Follow up individually, if possible, to ensure stakeholders have the opportunity to privately voice their concerns. Understanding how to present a business case is as important as knowing how to write a business case. If you follow the steps described above, you will have a higher chance of success.
Business case resources
When learning how to write a business case, it’s helpful to have best-practice templates to work with. Here are some resources you can use:
Smartsheet provides numerous business case templates, including one-page business case templates, construction and project management business case templates, and a PowerPoint business case template.
Safety and quality
The Australian Commission on Safety and Quality in Healthcare provides a solid template for healthcare (and general) business cases.
The importance of your business case
Business cases have significant impacts on organisations. They help steer everything from small decisions to those that change the course of organisations forever. Learning how to craft best-practice business cases can set you up to be effective and efficient when you prepare them in the future.
Learning how to write successful business cases is one part of what success looks like as an executive in modern organisations. Broaden your horizons and opportunities with an Online Master of Business Administration from James Cook University. Learn more here.