An effective corporate business case is a multipurpose document that generates the support and participation needed to turn an idea into reality. It explains what the idea, problem or opportunity is about, how and who it will affect, what others are doing, each of the alternatives, the associated impacts, risks and cost/benefit of each alternative, and makes recommendations.
Figure 1
In general, any initiative that will have a significant impact on either internal processes or the delivery of products or services to customers/clients, particularly if it requires significant allocation or reallocation of resources, should be justified by means of a business case. A business case is typically required to gain corporate commitment, executive and/or Board of Directors approval, and for special funding.
A business case is scalable to the nature and impact of a decision, although the complete thinking should be covered and documented. The number of pages of a business case varies, based on the subject matter of the case. It may be a brief 1-2 page document or an extensive evaluation that takes 75-100 pages. However, the length of the business case should be kept to a minimum, ensuring it stays on topic, presents relevant information in a clear and concise manner that is focused on supporting management in making decisions. A sample outline is provided in Figure 1.
Figure 2
The main business case is not a static document. The business initiative could spawn multiple projects (e.g. feasibility study, request for proposals, development, construction, implementation and transition), each one may warrant their own business case for funding/resource allocation. Once an initiative has approval to proceed, the business case should be revised and updated at key decision points. To benefit from the business case methodology, a rigorous, objective and honest approach is required in applying it. Figure 2 illustrates the dynamic nature of a business case.
The complexity of a corporate business case and time taken to prepare it depends on the nature of the business initiative. For instance, the extent to which an initiative has some or all of the following characteristics:
The rule of thumb for business case preparation time is five to ten percent of the anticipated project implementation time frame.